As the world later learned, mortgage companies were making rich profits during the boom by loaning money to people for homes they couldn’t afford. The strategy was simply to write unsustainable mortgages, snarf up the fees, and then unload the resulting securities—the sausages—into the booming mortgage security market. In one notorious case, a strawberry picker named Alberto Ramirez, who made $14,000 a year, managed to finance a $720,000 house in Rancho Grande, California. His broker apparently told him that he could refinance in a few months and later flip the house and make a tidy profit.
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