They didn’t loose their minds. They were always going to sell the paper they issued. They weren’t dumb enough to hold it.
Why do folks not want to finger the real culprits, the Federal Reserve and the regulatory agencies (including the FR) that oversaw this mess. The banking system under the watch of a lose monetary policy created a lot of money that was there for the taking if you were in this line of business. Bush had a policy of home ownership for everybody. Imprudence was in the political air.
No these folks didn't lose their minds. They picked up money lying around for the taking.
SO WHO BOUGHT the BAD PAPER??? I NEVER could figure that out!