Let me throw in a balanced view :
Don't go for the "keeping up with the Joneses" crap, periodically upsizing your home to a new one with granite countertops etc. Consider what you need, and how much you *know* you can afford without risk. Don't think that you "need" a bigger, fancier house just because the people you know are buying them. If you buy into a price range that has a risk that you'll run into payment problems, then these things can happen.
My wife and I bought a house 16 years ago, and have lived there ever since. We've watched friends and coworkers "upgrade", and we've seen them struggle to make payments even as the market price of the houses tumbled. Meanwhile, by being more practical and staying with what we had, my wife and I have no worries about this at all.
 Yes, the actions described above are deplorable. I won't defend their morality, but that doesn't mean you shouldn't try to keep out of trouble. Just like you wouldn't leave your wallet sitting out on the front seat of your car, don't court trouble here.