Widespread foreclosures and the collapse in home prices in many areas of the United States that began in 2007 and continued through 2008 and 2009, spawned an ongoing global financial crisis. As a result, the United States has engineered a series of unprecedented market interventions designed to stabilize the housing market and the financial markets dependent on mortgage-backed securities. However, standard economics provides a compelling explanation for much of the increase in household mortgage obligations. This working paper focuses on underlying questions related to consumer behavior and looks at the impact of these developments in the housing market on household financial condition.