Unfortunately, I also know of several lenders who had knots in their stomachs every time they went to work (for builder-owned mortgage companies) because they were forced to do what they knew was wrong in order to keep the money coming in for their families. Could this explain why there are subdivisions that are only a few years old with a huge percentage of vacant and vandalized homes?
These are just a few examples of different loan programs and - most of which are not now avaible now. This is either because there are no investors willing to buy these loans as investments, or because the have been effectively or actually outlawed by the government.
So now the government stepped in and is fixing he problem - not! The fact is the problem fixed itself. There are no investors out there buying stated-income 100% financed loans - and there will probably never be again! Loosing a few trillion in wealth tends to make a permanent impression.
At the end of the day all the brokers did was match-up the borrower with the loan product they wanted. During that time borrowers didn't care about the loans they got, investors didn't care if the loan file was a complete work of fiction, and rating companies just cashed the checks. Everybody got what they wanted, but nobody understood what they got.
Of course, after a while these early pioneers of the new lending order were pretty sure they had re-invented the mortgage business. And it was hard to argue with them. They were making hundreds of millions of dollars; the loans were performing and everybody was getting rich.