A recent BBC report documents the emergence of a tent city in Los Angeles filled with people who were unable to make the mortgage payments on their houses. Based on the comments in the Youtube clip and the Digg.com posting people seem to be less than sympathetic towards those who were forced into tents and trailers when the mortgage bubble finally burst. However, to simply chalk up these people’s situations as indicative of their inability to make good, educated decisions is a gross oversimplification of the problem.

When these people who previously could not fathom the thought of owning a home in an area with sky-high real estate costs like Los Angeles were suddenly presented with Adjustable Rate and Interest Only Mortgages by banks and mortgage dealers they understandably jumped at the chance to have their piece of the proverbial American dream.

Given the immense weight put upon owning a home by financial experts and American society as a whole, these mortgages seemed like a Godsend to the millions of people who felt having a home of their own was too far out of their reach.

These mortgage brokers often preyed upon minorities and lower income families because they knew that the possibility of owning their own home was too great of a dream for them to pass up. Thus these families, like most other Americans, were quick to sign their names on the dotted line without reading the contracts in their entirety and ended up with nonsensical mortgages that actually cost much more than advertised and now for the first time in 40 years Americans are seeing the values of their homes decrease when compared to only the year prior – that is how you end up with today’s subprime mortgage crisis, massive foreclosures, and the emergence of tent cities in places like Los Angeles.

This notion of the homeowners’ poor choices being solely responsible for these “new Hoovervilles” if you will, shows that too many people are not seeing the bigger picture in crises such as this where several societal and personal factors collide to create a massive problem that will affect all Americans, not just those who could not make their mortgage payments. This lack of understanding of the depth of the problem also shows how far we are from a comprehensive solution to a crisis that was a perfect storm of social stigmas and bad financial judgments whose effects will be felt for years to come.