If we are still talking about 2008 the drop in loan requirements was due to home values rising so fast the banks knew if there was a problem there would be profit in the foreclosure. Allowed no documentation loans with very small risk premium. I remember reading people would lie on the loan as it was taken at the stated value and where the payment would be 2x the actual gross income. Then the foreclosures started coming fast and furious capping prices. Foreclosures lost money and the whole thing hit the wall.
This was not your devil, the Fed, FDIC or the regulators, deep state, or the boogie man of the government. Just greedy business misjudging the changes in supply and demand.
The realtor pushing the buyer each with their own dreams initiated the bad transaction. The banks allowed this because the market seemed to protect them until it did not. Realtors and independent loan brokers were printing money. (and I know as my wife was in the business but did not participate at this level) Buyer and lender were the losers. All this was well known at the time in the industry. Many just grabbed all they could and washed their hands of it.