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Locked out of homeownership: lending practices that prompted foreclosures at heart of recession.

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The causes for the worst economic crisis since the 1930s are many, but at the core of the problem was a sweeping relaxation of underwriting standards by lenders, fostered by a climate of excess capital, escalating housing values, and readily available profits from the making and selling of home loans.

Not only were lenders approving mortgages without proof of income, borrowers could get loans without down payments, at reduced and sometimes zero interest rates, with the ability to defer monthly payments.

At the frontline of the mortgage lending system were brokers such as Dan Williams, who helped borrowers find the best terms for their loans.

"Everyone was happy as long as housing prices continued going up," said Williams, who now heads up his own firm, San Diego Lending Solutions in Mission Valley. "As long as the gravy train kept flowing, there were a lot of people that were doing lots of things that weren't right."

Williams said while he was working at another mortgage brokerage firm about four years ago, the standard practice...

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