FICO scores existed and were ignored, yes. Lenders would make money by originating loans and selling them to larger financial institutions, so they had no skin

FICO scores existed and were ignored, yes. Lenders would make money by originating loans and selling them to larger financial institutions, so they had no skin in the game when it came to counterparty risk. Lenders certainly had access to FICO scores, but they had a profit incentive to pitch and approve loans to unsuitable borrowers, and there is a strong argument to be made that they used passable FICO scores to justify bad loans to people with no income and no assets. https://en.m.wikipedia.org/wiki/Predatory_lending https://en.m.wikipedia.org/wiki/Predatory_lending https://en.m.wikipedia.org/wiki/Subprime_lending https://en.m.wikipedia.org/wiki/Subprime_lending https://en.m.wikipedia.org/wiki/NINJA_loan https://en.m.wikipedia.org/wiki/NINJA_loan Separately, one of the many differences between Europe and the US leading up to the crisis was that thanks to years of comments from Alan Greenspan, it became culturally acceptable and even encouraged for American borrowers to "tap into their home equity" by taking second mortgages. So, when houses got cheaper, many people who had been paying loans for a while still owed plenty of principal. One might argue that there was negligence on the part of second mortgage lenders here.