My (now deceased) mom worked in real estate for 17 years and she said that was exactly the way the business worked. Every real estate appraiser in town would get together for breakfast once a week and they'd all compare notes. Some of them probably didn't even realize they were engaging in selection bias. I've seen the appraisal forms; all they said was to list 3 "similar" properties currently on the market and 3 "similar" properties that had sold recently. I saw absolutely no safeguards against selection bias.
I actually applied for a job as a loan officer but my experience as a statistician was not qualifying experience -- there was a wide range of clerical jobs that were considered qualifying experience -- yeah, they'd know about logistic regression, don't you think?
But the great quantity of loans are made in the big markets.
I think the bank made a mistake turning away a stat guy. My specialty in B School was Operations Research...obviously, I am inclined to the strong analytical stuff like you. I generally don't trust the system, but bankers are staid and the institutions that buy there pools are smart guys. I know how the system works but there is always room for error.
Best regards...sorry about your Mom.