You know, the same thing was going on in the automotive industry at the same time. There the lenders were often even worse than the dealers.
I can remember rehashing many applications with loan officers where the conversation went like this...
Me, "No, he does not have a second job and there is no other source of income."
Loan officer, "Ok then, lets go over it again. He makes $4200.00 a month and .."
Me, "No, he only makes $3000.00 a month and..."
Loan officer, "Listen! You are not listening to me! He makes $4200.00 per month and that raises his internal score to a B+ tier. Congratulations! You now have a deal with zero stips (stipulations or prof of anything) and you can write the contract for 75 months and three points retention. Just make sure that "incorrect" first application gets out of the deal jacket and the corrected one in. Send me more deals!"
The worst lender of all for this was one called Americredit Financial. They had an up and down relation on Wall Street for years. Their claim to fame was a "proprietary" scoring system that could just see into the future how different loan tiers would perform. Can you say bullshit?
Well as it turned out, when loans would start to fall behind they would call up the customer and offer then a friendly deferral for a small fee and just roll the payment to the back of the loan. They eventually started to offer lots of opportunities for deferral. I also seem to remember some other hijinks with the methods in which they accounted for reposession losses, etc. Of course if a loan was deferred, then it was not delinquent and never showed up in their reports and 10k's.
The story gets more interesting. Along the time that the shit starts to hit the fan in 2007 and 2008 Americredit is on the ropes. They securitize their loan portfolios much like the other bastards were doing with the mortgages. Except now with the shorter terms shit was coming to a head quickly. Guess what happens next?
Obviously they go under right? Yeah, right.
Along comes General Motors in the form of Government Motors and buys the rotten fuckers out. Ever hear of a little company called GM Financial? This is what GM decided to rebrand Americredit as after they bought it for approx $3.5 billions in funds that they got from, oh I don't know, maybe the American tax payer.
God bless America and God bless the Obama administration.