Underwriters are the problem? ... Greedy, ignorant bankers, and banks, and the trash they attract to write loans and commit fraud are the culprits, as well as unscrupulous real estate agents, and appraisers, but let's make one thing clear. Without the crap product, and those shills on Wall Street, creating garbage to repackage it and feed it to ignorant consumers, they'd still find a way to sell this Ponzi scheme. ...!
Have no doubt that "Wall Street" made this country great. Without stock markets, and everything that makes them function, everyone's savings would be sitting in little bank accounts earning minimum interest. Stocks and stock markets are a method that allows the "little people" to invest and put their money to work as capital to fund the growth, research, and manufacturing capabilities of the companies in our country. Remember, those are the same companies that give us jobs, medicine, homes, and food.

Why did all that happen? Because it is a more efficient use of money. "Efficient markets" is the driving force. It is more productive and the result is our life_style_ that World envies.

Breaking up home loans into the "service" component (the mechanics of collecting monthly payment) and the investment component made markets more efficient, and was a good thing.

The problem arose when all the risk was removed from the loan closer, because he got his fee for closing the loan, but he sold the loan off and had no ownership risk if the loan defaulted. That created a natural incentive to close as many loans as the law allowed, and then some. So now, a natural correction took place when the bad loans came home to roost.

The result will be some more laws or rules to tweak the process to make the loan closers carry some of the traditional penalties or risk for making bad loans. But legislators will never block the more efficient loan market system because it greatly benefitted home buyers and the entire industry.

Background checks had very little to do with the problem or the solution, although they are great for blocking out and out crooks with a criminal history. Typically, Pre Employment Screen Background Checks include: Verification of identity, SSN, employment history, education, and address history. Checks State and county criminal records, sexual offender, terrorist watch, credit check, bankruptcy. (Federal criminal records available.) Matched by name & birthday.