You're saying the same thing. If the underlying lone is precipitated by blatantly or coerced false income information then that was the problem. CDOs are simply derivatives that derived their value from those miss rated loans. So yes it was poor people, but it was also the people way to willing to give those people loans at rates way larger than they should of for financial instruments.
The people employed by the banks were complicit. It's that simple. If Jane Doe applies to buy a $1M home, and no one checks her credit and sees that she already has 3 other similar properties, whose fault is it? Passing the buck on due diligence is such a cop out. It's like a drug dealer justifying his actions; "Hey if I don't sell it to her, someone else will."
People who work in risk and compliance NEVER get promoted to the top because they are cost centers, and prevent other people in the company from getting that huge payoff.
Thats hard because you can easily blame that on consumer credit rating agencies like Equifax. Because their number doesn't weight length of credit repayment. So if you only have had any debt for 1-3 years you can have the same score as someone who has had debt for 10-30.
It was a cop out though. I think no one in the banks thought to challenge that. Now they do but previously they didn't
