In order to meet the requirements to loan to risky borrowers/low income households, banks came up with innovative loans like ARM's, no-doc loan, stated income and so on. When the housing boom of the late nineties and 2 thousands came about many used these loans to buy their houses. They just had to get on the own-a-home bandwagon.
Once on it they could just refinance over and over again as the house increased in value, extracting equity to buy nifty cars, tv's and world cruises. Unfortunately the boom went bust.
That statements really border line. I only know of one couple, personally, that were loaded up on an arm mortgage, and they were sold a line of BS by the Realtor and builder about buy today, when the mortgage resets you can sell at a profit and have a bigger down payment next time. My advice to them was to sell and get out of the deal and then find an attorney to collect off of the builder and real estate broker. Make a good test case.