A sold sign is shown outside a single-family home on the market in Denver in March 2018. (AP Photo/David Zalubowski)
In the decade before the 2008 financial crisis household debt increased greatly while the quality of the borrowers declined. Mortgage originators reduced required down payments, required less proof of credit worthiness, and approved less qualified borrowers. This worked because they made money on the volume, not quality or loans, and suffered no losses because all the loans were bundled and resold before any could go into delinquency or default.