I have several friends actually in on these deals. If you ask them to justify their decision, you'll get a respone like this: "Hey, I plan to sell the house for a profit before I actually have to start paying the principal."
Yeah, right. Basically, even if housing prices are flat over the next few years, the pain will be widespread.
You know, California is a great place to live. Just the other day I saw a billboard which read: "Bad credit? Who cares? We can get you a loan!"