Everybody knew the content of the mortgage bundles which were bought by the major institutions who buy from smaller investment firms so that the smaller firms would have the cash to loan out to still smaller fish so they could loan on mortgages to individual builders who....
The hope was that the upward swing would continue.
It didn't.

Some large investment and holding corporations, like Berkshire Hathaway (Warren Buffett, CEO), saw the red signal and largely bailed out of the mortgage paper.
Buffett has just used his bucks to take control of Burlington Northern Santa Fe (US, biggest railway).

Goldman Sachs, who also saw problems ahead, was varied in its investments, so was able to gobble up a competitor or two.

AIG is fast getting back on its feet.

The big investment banks, insurance, pension, etc. companies are our engines for growth; improvement will be slow, but steady unless EU problems and unnecessary wars derail the US again.

China has dumped some US and EU bonds, which doesn't help.