Professor Stan Liebowitz identifies the cause of the bad lending standards here.
Who dunnit? The federal government, egged on by various radical groups.
This was another of the many instances of bad consequences following the politicization of private decision-making. Once political pressure was exerted to compel lenders to abandon their traditional caution in making loans (for the supposedly good purpose of expanding minority home ownership), it was just a matter of time before the defaults started happening. Liebowitz explains it all very clearly.
