The government has bailed out homeowners who are in danger of foreclosure. Furthermore, future homeowners may deduce that the government will again bail them out in the case of future economic turmoil. The government inadvertently has created what is known as:

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Moral hazard occurs when one party takes on risk because they know that another party (in this case, the government) will bear the costs of those risks. By bailing out homeowners, the government may unintentionally encourage risky behavior in the future, with individuals assuming they will be bailed out again if needed.

The Government Has Bailed Out Homeowners Who Are in Danger