Those programs have always existed, but they have never truly been an issue. Before the housing market crash around 2009 getting a housing loan was a joke. I was living in Miami at the time and I bought a house around 2005. I went to get mortgage from this lady that was a mortgage broker. As I was filling in the paperwork she would tell me to inflate the amount of money I made, the amount of years I had worked at the company I worked at, I mean it was a joke. I got pissed off at her and told her that I made enough to afford the house, I was putting down 20%, that I had good credit, and I did not need to lie on the application to get a loan. She explained to me that by putting inflated numbers it was easier to get a loan and to get a favorable rate, and that no one was going to check that anyways. I replied that no one will probably check it as long as you pay on time and nothing happens, but I asked her what if the **** hit the fan, and you could no longer pay the loan? At that point someone might go back and check your application, and easily find out that you lied on it, and lying on a mortgage application is fraud. Then what? Was she going to go to jail for me? After that one she shut up, and just let me put down the correct information. I ended up with the loan I needed and with a good rate anyways, but that is how it was pre-housing collapse.
This crap where banks were not to check on these loans and the sub-prime market all started with government polices that were supposed to help minorities get homes. The feds were basically telling banks that they were being racist, and by coercion, basically forced these policies on banks, where they were no longer in a real position to deny people mortgages. Obviously the banks and the hedge fund managers made it even worse, but it all started at the government level. Anyone back then could buy a house or 2 or a dozen, and many did. I had a neighbor in Miami that had come in floating on a truck tire inner tube with a piece of wood on top of it attached with rope from Cuba, a little over 6-7 years ago. He sat all day in his house with his wife and did nothing. When he came into the USA he was told that he could just go and buy homes, rent them for a little while, and flip them, as the market at the time just kept going up, and make a fortune. I am not aware that this guy ever worked in the USA, and he owned a dozen homes that he was renting and flipping. I moved out of the neighborhood just as the market was crashing, but I bet that it did not go well after that for my neighbor. Being waaaay under water on a dozen homes, worth well into the millions, with tenants that were unemployed and could not find work, was not a good thing... The house I bought in 2007 for $460K, I sold at the end of 2011 for $250K, that is how bad it became, and in the middle of the crisis, circa 2009-2010 that $460K home was selling for as low as $150K...