Blame it all on Mozilo! I was in the lending industry in the late 70’s and the savings and loans that I worked for had their loans flagged: FO___ - friends of (fill in the blank.  For example, if I, Phyllis Harb were the big Kahuna, the files would be tagged FOP ( friends of Phyllis),  Mozilo's example were tagged FOA.

I would venture to say that every institution, and I worked at many during my mortgage banking days had a “friends of program.”.   And so what?… at least these friends predominantly had good credit and I think all of them or nearly all had a down payment… this is not the problem - it is about the risk.

I have plenty of tales to tell from my mortgage banking days. And many are very interesting,…. I am NOT an economics major but my humble opinion: you should not reward "'executive"s for stupid business decisions.