Subprime stated loan approval process

I got to thinking about this subprime credit mess and all i can say is "no wonder we're in this mess". I worked for a subprime company for two and half years during the mortgage boom. Our approval process can only be described as easy and lenient. An underwriter's their job is to determine if a borrower is credit worthy enough for their requested loan amount. A good underwriter should be questioning the reasons for requesting the loan and calculating if the borrower can actually afford the mortgage payments. And if the borrower can afford it, the underwriter should look at what documents support that income stream.
These basic principles can be disregarded when using the Stated Loan. You no longer need income supporting documentation. Subprime will just take your word for it. Hey... and if you over state your income, dont worry we'll kindly suggest what figure the borrower should be making.
A trashman is making 110k a year. Seems in excess? Yeah probably, but Subprime will calculate the actual debt ratio and we'll kindly suggest that he really only needs to state 70k for approval. Subprime will suggest this to an account manager because management is stressing the importance of working as a "team". Then the account manager will tell the loan broker directly that they should re-submit an application with a 70k figure. But wait... a trashman making 70k a year, where can i sign up for that job? Oh Subprime just saw that the borrower has a business license. This is now legit because all business are extremely profitable and are always making tons of money. No problem. Stamp -> Approve -> Fund it->. ("i'm Subprime funder, we'll fund it and gather the documentation afterwards).
Welcome to subprime lending. No wonder we're in this mess.