ARMs were not really the cause of the 2008 crash, however. The REAL cause of the crash is the fact they were giving out $400,000 loans to people making $25,000 a year. The lending restrictions were so lax that you literally didn't even need to prove income if your credit score was like 730 or higher, and so lenders were literally just writing loan after loan after loan, packaging it up and selling it off, and then the note would get bundled on wallstreet and was sold as "A" rated, when they were total garbage.

It was a massive fraud that many people took a part of because no one wanted to stop the gravy train. Hell, in those days you could even pick your own home appraisers. There were so many things wrong.

Also, the reason ARMs screwed over many many people is because when the 2008 crash finally happened, all of the banks, that just got bailed out with a trillion dollars in taxpayer money, had no incentive to allow people to refinance out of those crashing mortgages, so they literally went ultra hardcore on mortgage loan restrictions and made it nearly impossible to refinance out of something. Also, when the mortgage world collapsed, the entire economy collapsed. It wasn't just the mortgage world that collapsed. We literally entered the so-called "Great Recession." Millions lost their jobs. Millions more had pay cuts, lost bonuses, everything. Massive amounts of corporate bankruptcies. Wages stagnated for 6 or 7 years with high inflation, and people got poorer... People were so desperate just to have a job that all of a sudden all of the so-called entry level jobs for teenagers at minimum wage were now being all taken up by people in the 30s and 40s just trying to find work, and teenagers couldn't even find jobs because anything available was taken by an adult.

It was crazy times, and it had far less to do with ARM loans than the outright fraud and shady practices built into the system in those days.