These were margin loans against the securities in their brokerage account. Such loans are available automatically to any brokerage customer; you just have to apply. If you have the securities, they will approve you. If you have $1 million in securities, then you can easily borrow, say, $800K. The interest is low because there is no risk to the brokerage. If stocks fall, they will sell out your account.
Sen. Cruz is a great candidate, but he's got plenty of ties to New York elites too. He's just clever enough to try to use that issue to attack his opponent. But he may have been a bit too clever. Lots of people carry negative stereotypes about people from various areas of the country. By making that tactic legitimate he'll have to face it in the general election if he is the Republican nominee. And then he'll be the one on the defensive and the New York centered media will be hammering away.