However, the credit intermediaries did not appear to have factored-in the impact pf potential changes in the macroeconomic / interest-rate environment in their credit assessments of such borrowers and on their repaying capacity. It is reported that the lenders also enticed the home loan borrowers through “teaser rates”, which were artificially low interest rates, valid only for a limited initial period.
There was wide-spread adoption of the “originate-to-distribute” model by the credit / banking institutions under which the loans were granted not with the objective of holding till maturity but for securitising them rapidly.