AP via NCTimes.com: Californians, banks taking big risks on real estate

Man people are going to get hurt - and its starting already:

"You're a first-time buyer and all you know is that for the past five to 10 years, anyone who's bought a piece of real estate has made money. All they've seen is the market go up, up, up," said Stephanie Vitacco, a Coldwell Banker real estate agent in Los Angeles' San Fernando Valley.

"That's the mentality. But what they haven't experienced is that the market also goes down," said Vitacco, a 17-year veteran who specializes in first-time buyers.

Vitacco says she now routinely shows homes to clients who have agreed to 100 percent or 110 percent financing.

She said she is working with a young couple forced to sell their three-bedroom home after just a year because they can't make the payments, which included a "teaser" interest rate.

The home has appreciated enough that they will be able to afford a security deposit and rent for a new apartment, but not much more, Vitacco said.

"Somebody talked them into it," she said. "But they're barely able to make ends meet, they can't afford to stay there. They should have never been told to buy; they were much better off renting."

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