Will the abundance of recent foreclosures lower the credit standards?

Marie asked:


It is my opinion that because so many people are defaulting on their mortgages, they are probably defaulting on other loans in order to try to keep their homes.

If a high percentage of Americans have bad credit, then will the financial industry have to lower the standards for credit in order to continue making loans/money????
I worked in the mortgage industry until recently and am aware that lending practices are becoming stricted because of the abundance of foreclosures. But eventually these companies are going to feel the effects of these recent changes and will have to offer subprime mortgages or lower the standards if they want to stay in business.