Even if a loan officer tells someone a negAm is a good idea because home prices will appreciate it cannot be construed that he misled anyone because it is possible the loan officer is foolish enough to believe in perpetual appreciation himself!

Huh? So the homebuyer is to blame because they are stupid but the loan officer is NOT to blame because he is stupid? Sounds like somebody has been listening to talk radio. Everyone is to blame — borrowers, lenders, and whoever bought the MBSes. All of them are gonna ask uncle sam to bail them out. The media is setting you up right now to blame the homebuyers because the lenders and MBS holders want to get their bailout money from your tax $$$. As usual the little guys will get shafted and the big guys will get richer with your tax $$$.