According to a Fortune article (currently not online), the U.S. Internet bank ING Direct has had 15 foreclosures out of 100,000 since starting in 2000. Compare that to Countrywides 94,000 foreclosures last year. The difference? It has kept all of its $26 billion mortgage loans on its books and restrained from slicing and dicing loans into complex instruments, with underwriting standards suffering as the incentives drives management to maximize volumes.
Common sense often makes good business sense; if businesses develops in other directions its often a function of a malfunction of alignment of the incentives (between owners / board of directors / management).
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