I wholeheartedly agree about paying off commitments you have made - loans are commitments.
That said, banks have a financial responsibility to owners, shareholders, etc. to make sound financial decisions using due diligence. When the government stepped in (Barney Frank, SJL,and Jaime Gorelick, Franklin Raines, Jim Johnson of Fanny/Freddy fame), and demanded banks loan money to people who had no business getting anything but a payday or car title loan, banks did what anyone would do.
They bundled up their liabilities and sold them to other banks and investors with guarantees by the government. We began to see things like credit derivatives. All this caused by Democrats IMO.
Loans got so easy, they were loaning over value, sometimes upwards of 125%. They were also loaning out huge amounts for junk houses - ramshackles a huckster could get for a song, get an estimate for repairs and then a fake assessment of value based on the repairs and a "loan" for over 100% of that potential value. There was Obama daughter who bought a house for like under $50K, got repair and after-repair inflated value estimates and got something like $400K. Never fixed a damned thing and walked off.
When the Government forced the Banks to Loan Money because the so called Playing Field wasn’t level, all bets were off.
I worked for a Major Bank back in the 70’s that had very strict Lending Guidelines in place. When The Community Reinvestment Act was instituted under Carter, the Bank pledged $10,000,000,000 to the Program.
I was talking to a Loan Office about it and he said that it was great Advertising, but many Loan Officers expected the Program to impact Loan Delinquency Rates since the Lending Guidelines were artificially lowered.
It was obvious from the get go. Reparations cost big bucks.