Around here, people who have lost their homes are either moving in with family or moving in and renting together. As Eric Cartman said on South Park, "Poor people tend to live in groups."
The people that I know with large families who've lost their homes have had to send some of their kids to live with their older siblings who had already moved out on their own. The parents are renting a small apartment, trying to save up to rent a house that will hold all of their children. It's hard to get six kids in a two-bedroom apartment. One family has sent one of their older sons to live with his aunt and uncle and an older daughter to live with her grandparents and are in an apartment with the youngest children.
Some of these people took out second and third mortgages for silly things and it's hard to feel sorry for them, although I feel sorry for the children. But some of them weren't very bright (as in just a few IQ points above mental retardation) and were preyed upon by unscrupulous lenders who put them into mortgages with five-year balloons. When the balloons came due, the housing values had dropped and they couldn't refinance.
I think the notion that people could ever get 100% financing was ridiculous. If you can't discipline yourself to save for a down payment, how in the world do you think you're going to be able to save up for home repairs and improvements or for a refi?
StAnn