Was it, is it still, all due to moral hazard, bad regulation/oversight, greed, or...?
Mortgage rates are so low that it may seem like a great time to get a mortgage. For banks, however, it probably is the greatest time ever.
The profit margin on the rates that they can charge customers and the price they can earn for selling those mortgages to investors is at a record. This is measured as the “spread,” or difference, between mortgage securities yields and mortgage rates.
However, the two big banks that are left are hiring and/or moving people around to greatly improve their abilities to originate new loans and handle those who want to refinance.
We are told that part of the reason the interest rates haven't come down more at the banks is because the banks have wanted to dissuade customers while the banks ramped up capabilities. Yes, they made higher profits doing that, but now the competition for making more loans at lower rates is facing them whether either of them likes that or not. Plus, the Fed is leaning on them.