"Someone tell me why they would make all these loans in the first place.'
To forestall legislation in blue states forcing them to stop redlining, profiling, and discriminating against the leftist constituency. In other words, adopting bad business practices to avoid losing market share or being forced to adopt bad business practices.
Bingo, this is definitely part of the rush to provide "affordable housing" aka taxpayer secured/fleecing that is the unintended consequence of blue state legislation and the enabling of corrupt financing schemes...we'll all pay for this one way or another eventually.