It's hard to pin down what "started" this, other than the usual two motivators: fear and greed. Foreclosures specifically, and the housing bubble more generally, are certainly a part of it; pundits and politicians will debate what "started" it, but the two numbers -- the dollar amount of the haircut on foreclosed mortgages, and the estimate of the size of the recent TARP bill -- aren't really mathematically related in any meaningful way.
/jordan