Mortgage defaults alone were not enough to cause the 2007-2008 financial crisis.

See The Rise and Fall of the U.S. Mortgage and Credit Markets, "Key Findings":
(http://www2.owen.vanderbilt.edu/lukefroeb/USN.econ/week.6.2009.Milken.Crisis.overview.pdf)

"The total value of housing units in the United States amounts to $19.3 trillion, with $10.6 trillion in mortgage debt and the remaining $8.7 trillion representing equity in those units as of June 2008.

"Of the approximately 80 million houses in the United States, 27 million are paid off, while the remaining 53 million have mortgages. Of those households with mortgages, 5 million (or 9 percent) were behind in their payments and roughly 3 percent were in foreclosure as of mid-2008."

The potential mortgage defaults alone were not substantial enough to cause a crash of the magnitude that actually occurred.

"The notional amount of CDS increased from less than $1 trillion in 2001 to slightly more than $62 trillion in 2007"

The banks created derivatives that were valued at many times more than the underlying mortgages. CDS was insurance on the mortgage-backed securities; if CDS was at least six times the total mortgage debt outstanding, the derivatives that the CDS were insuring were likely at least ten times the value of the underlying mortgages (because banks often under-insured).