Given the unconquerable human weakness to inordinate avarice...
This is called moral hazard: the risks have been disconnected from the consequences.
Let’s say we issued $19 million in home loans with an annual interest rate of 4%. The gross revenue (before expenses) of our leveraged $1 million is $760,000 annually. Since the accounting of the $19 million in loans is highly automated, our expenses are modest. Let’s assume we net $600,000 per year after annual expenses of $160,000. Recall that the interest due on the $1 million line of credit is a paltry $2,500 annually.