It was the Hah-vahd MBAs who responded by securitizing the loans, removing the risk from the banks, and hence any market feedback.
I remember reading of a New Mexico or Arizona or something dishwasher at a diner, who made $14k / yr, being approved for a $420,000 mortgage.
You are precisely correct. Securitization was the issue and banks went far beyond meeting their CRA requirements once it became the massive and dishonest business that it was.
Remember when all the libbies then got outraged that the investment fund manager behind “The Big Short” saw what was coming with the mortgage-backed securities and made a fortune on the collapse?