Yes, people will lose their homes. No, they probably should not have been in those homes to begin with. Yes, the economy will take a hit. No, it won't cause another Great Depression as long as everyone keeps his head. Yes, that will be extremely difficult if the mainstream media keep acting as if the entire world is about to be swallowed by a giant black hole.
The factors which led, in the 1930s, to the Great Depression do not exist today--mainly because the finance laws were changed such that those conditions are now illegal. The current situation (not that I do not say "crisis") has been arrived at after years of government meddling in the housing market, pumping money in, sending ever-greater amounts of cash after a fixed amount of real estate.
Besids that, with interest rates kept on the floor by the Fed, money has been cheap for decades--if you want to borrow $400,000 instead of $300,000 the interest doesn't amount to much more--and so people bought much more house than they really needed. New home prices inflated as the sizes went up; the prices for older homes followed suit: that house that was $50,000 in 1990 is now across the street from new houses that sold for $300,000, so by association the older house is now worth $100,000 just because of the neighborhood it's in.
(I am, for the purposes of this discussion, not factoring inflation into the numbers. Assume all figures use the same dollars.)
So yesterday the Dow lost about 7% of its total value, and today it's gone back up again by 2% from there, and it'll be jangling around for a while longer. The end result of all this will be that a few companies have to reorganize and a few others will disappear. Net change 10 years from now: approximately zero.
Trust the market. It always works.