My wife was an underwriter in the sub-prime mortgage industry. She worked for three companies, and they were all pretty bad. At least a few times a month if she turned down a loan for not meeting guidelines, she would have a loan officer standing at her desk screaming and swearing at her.
If they couldn't browbeat the underwriter, then half the time the company president would override the guidelines. The guidelines themselves were a sham. They were written in house by people with no particular expertise, then rubber-stamped by investors on Wall Street.
In the trenches, everyone knew there were bad deals. They were just making too much money to care.
As a college student who was working as a lowly bank teller between 2004-2008, I was convinced these mortgages were bad.
People severely under-qualified were coming in, signing up for 80/20 mortgages, $0 down; never mind that the rates were going to skyrocket in a few years! We'll all be rich then, things never go bad, right? And if they do, all these things are insured anyways!
Well, sure, they just figured the government would bail them out by printing a bunch of money and screwing everyone else, and everyone would forget all about it after a couple of years.
If they couldn't browbeat the underwriter, then half the time the company president would override the guidelines. The guidelines themselves were a sham. They were written in house by people with no particular expertise, then rubber-stamped by investors on Wall Street.
In the trenches, everyone knew there were bad deals. They were just making too much money to care.