But lenders didn't care.
They had passed down the mortgage to investment banks . They didn't have a problem either because they used their money to hire the rating companies to give triple- As to their CDOs (all loans packed together).
It's surprising how companies can cheat and manipulate things and get away with it. With the triple-A CDOs investment banks gained a huge advantage. Investors were now interested in buying this triple-A CDOs because they were highly rated and seemed like a good deal. In the end, since the rating was fake, the investors ended up losing money because the house buyers were not paying back. So who loses? 1. The home buyers because they are in huge debts, and 2. the investors, because they invested in CDOs that were toxic assets.