“We called them ‘foreclosure loans‘ because they were doomed to fail,” said the [real estate] agent, who didn’t want to be identified because she’s still in the industry. “The lender expected the borrower to lose the house and the bank would resell it for its higher appreciated value. But the market dropped and they got caught with their pants down.”
So they made loans with no due diligence that they knew would fail? Seems to me laws could have been broken here. Criminal as well as civil investigations are called for, because fraud may have indeed occurred.