How did the subprime mortgages start the financial crisis?

Someone came up with the concept of the "Adjustable Rate Mortgage." It was a way that poor people could buy a fairly large house. Their monthly payment would only pay the principle, insurance, and taxes for a few years. If they paid interest, it was at an extremely low rate. After a few years, the rate of interest greatly increased and the monthly payments went up by several hundred dollars. Newspapers, magazines, and liberal politicians praised it. Mortgage salesmen lied on mortgage application forms and no one checked on them. After the salesmen filled out the forms, the customers signed them. They did not understand all that mumbo jumbo. They trusted the salesmen. The salesmen gave the mortgages to the mortgage companies and collected their commissions. The mortgage companies combined the mortgages into large bundles. They had them given an AAA rating. The rating agencies decided that since there were so many, they must be good. They did not realize that a pile of garbage is still garbage. The mortgage companies sold the mortgages to companies like Lehman Brothers, Merrill Lynch and others. When the rates on the adjustable rate mortgages went up, the poor people did not have the money to make the increased monthly payments. The boom in house construction ended with many houses standing empty. Workers were laid off. They could not pay their bills. More houses were foreclosed. Where the boom had been the greatest, California, Nevada, and Florida, the collapse was the biggest. The financial crisis in housing caused one in lending in the financial markets in New York. Suddenly the lenders faced a crisis. Their money vanished. They had layoffs. New York was not immune to the problems of the rest of the nation.