The rise in mortgage defaults is mainly due to falling house prices and relaxed lending standards, like giving out loans with high loan-to-value ratios and without verifying income. Unconventional mortgages, like those with prepayment penalties or interest-only periods, didn't cause many defaults until 2008 because borrowers could switch to other loans. But as lenders tightened their standards, borrowers struggled to refinance, suggesting these unconventional mortgages could become problematic in the future.