Peerless
I don't doubt that you are correct in your assumption, being a US citizen you are far closer than I to what is actually happening.
However, I would have to say that though people will lie (or stretch the truth) on what they can actually afford they are encouraged to do so by these predatory "lo@n arrangers". For example, you said:
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thank goodness she actually listened to me and got out of that lo@n as soon as she could
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Which is my point, e.g. the person who arranged you mother's lo@n, did that person actually care whether your mum could afford the lo@n or did he/she care more about the commission they were going to get for the "biggest lo@n" they could secure
If lenders said "so much and no more" and did a cursory background check, e.g. statement of earnings from employers, credit check and insuring that any mortgage agreement was verified by an independent solicitor/lawyer, then there would not be so many working people defaulting on their lo@ns and/or mortgages and being thrown out of their homes.
I like you have no sympathy for those that lied their way or fooled themselves into bigger lo@ns than they could afford but on the other hand I feel that lo@n companies and their agents should be penalised for not doing basic "affordability checks" on the people they are lending money to.
UK Bob