If it's a government guaranteed loan, or they're just going to sell it someone else, why should they diligently check?
It's about transaction fees and transaction volume.
On the other hand, if you've got really good credit and assets, maybe they'll decide to keep the loan for themselves.
See how it works? The government (taxpayers) and MBS buyers will be left holding most of the crap.
Yep, all those loans are just being packaged and sold to someone else who repackages them and sells them again until they reach the ultimate bagholder -- Joe-6-packs mutual fund. Sweet how they work that.
Richard W.