How did Countrywide and WaMu Collapse?

Countrywide Credit and Washington Mutual were two regional thrifts (primarily banks that gave mortgage loans to homeowners) operating on the West Coast. They basically went under because the borrowers of some of the mortgages stopped making payments. All the lower quality loans were working out fine while house prices were skyrocketing in the early 2000s. When they stopped going up, the game was up.