The failing mortages in and of them selves IS NOT repeat IS NOT the current problem. The problem is with the C.D.S. that were issued on those mortages. It is estimated that there are over $45 Trillion worth of them in the market. Not all bad but not all good. Imagine if you will that some one is about to die so I take out insurance on them, then all my friends take out insurance on that same person. Well when he dies (mortage fails) the insurance has to pay up. Now with several time as many policies on each person (mortage) about to die (fail) the insurer goes broke. That is why AIG is no more. The CDS market was kept unregulated on purpose, it was to difficult to understand or so the regulators were told by the people running the market and the market became over leveraged and now has collasped.

http://en.wikipedia.org/wiki/Credit_default_swap