My anecdotal experience having applied for a mortgage during these crazy times (pre-2007) was that I could have put any lie on my application about my income an

My anecdotal experience having applied for a mortgage during these crazy times (pre-2007) was that I could have put any lie on my application about my income and it would have been approved. While I took out what I thought was a "reasonable" mortgage, I could have gotten one 2x bigger without much trouble. So, I agree with your point, not everyone was "doing the right thing".