After the housing crash, most of the people who lost their homes were people who bought their house before 2004 since they aggressively used their homes as ATMs and extracted cash by refinancing into larger loans or using home-equity loans.

According to Steven Laufer of the Federal Reserve Board, after he examined a sample of homeowners from Los Angeles County and found that 40% of defaulting homeowners had purchased their homes before 2004.

Additionally, the article cited that for more than nine in 10 of these borrowers, their original mortgage balances should have been less than the current value of their homes, leaving them with positive equity.

Despite all this, homeowners got caught up in the home-equity loan and the cash-out refinance, causing them to have loan-to-value ratios that were, on average, 50 percentage points higher than they would have been, the article explains.