Some people undoubtedly got a home loan because they were afraid of being permanently shut out of the market, and felt that the housing prices would continue to rise. And a great many people - minorities, especially - thought they were taking out standard loans and were given subprime loans instead. (In many cases, they *did* qualify for conventional loans.)

I can't say whether some form of bailout should be given, but changing bankruptcy law to prevent foreclosure when doing so doesn't harm the lender would have been nice. (e.g., if a person owes $150k on a house that won't sell for more than $100k, if the loan is modified to $100k, the bank doesn't lose anything.)