They had every right to believe their homes were going up in value and make decisions accordingly, especially from 2003-2006. Subprime lenders were selling loans to people who were not qualified to have loans that greatly inflated the housing prices. It doesn't matter if they person signed off on a mortgage, by law, they shouldn't have received it.

People were making decisions in a market they thought was fair. But, that market was fraudulent created by originators and bankers trying to make a quick buck.