You have it in backwards. The fact that people couldn’t pay their mortgages caused the great depression we’re in now. A lot of banks had to close

someone buying a 200K home without a down payment and only taking in 50K gross. Irrational exuberance, greed caused the crisis. nothing more, nothing less.

Generally, mortgage rates didn’t skyrocket.

Some sub-prime and alt-A mortgages reset after two years allowing the lender to raise rates however. But… rates are lower now than ever thanks to the Government using FHA, Fannie and Freddie to finance over 90% of all home loans and the fact that we are in a liquidity trap.

A simplified answer is that during the Clinton admin, there was a Dem push for making banks loan money to underqualified minorities, called the Community Development Act. Barney Frank and Chuck Shumer, both dems pushed Fannie Mae and Fannie Mac to underwrite these types of extremely risky loans.
Eventually, the financially underqualified loans resulted in the forseeable; you shouldn’t loan money to people who you know thru history will not be willing or able to repay it..and the bubble burst.

High rates weren’t the issue…rates were actually very low, which allowed millions to refinance and pull out cash from their homes, while others bought homes at super low interest rates with next to nothing down. The high home prices led to extreme affordability measures like option arms and 100% financing.

Rates are currently at all time lows thanks to government intervention, but they’ll eventually climb again as the economy improves.

http://www.thetruthaboutmortgage.com/what-causes-mortgage-interest-rates-to-move/

There’s a whole lot more to it, and you’re missing the mark pretty bad. You’ll probably fair quite badly on your book report if you don’t do some more research.