jducoeur

Basically true, although it all comes down to assessment of risk. While things were frothy, everyone was sure that foreclosures would be Low Low Low. Now, everyone is worried that the rate is rising and will continue to rise. That's not entirely irrational -- all those unwise ARMs are starting to tick upwards, and are gradually getting worse. So there is reason to believe that we're still basically at the tip of the iceberg, and that the rate will rise; that *uncertainty* is a large part of what's making things crazy.

But all that said: yes, a lot of people are just as irrationally worried now as they were irrationally sanguine before. Herd psychology is very powerful...