There may no responsibility to the customer when applying for a loan, but some loan officers felt bad when they knew the customer could not afford the house payment after the loan reset. They made the loans anyway. One website, Settlement Scams, shows how some loan officers made the loans anyway, telling about how they felt bad after the fact.
Prime borrowers were given subprime loans when they actually qualified for home mortgage loans at prime rates. All of today’s subprime problems cannot be attributed to borrowers with less than stellar credit. The truth is many problems can be attributed to mortgage officers and companies with less than stellar tactics. It does not take much intelligence to know that the total income shown on the borrower’s paystubs will not be enough income to pay the mortgage after a year.