Yes, underwriting standards declined substantially. That was a reason why the bubble happened.
However, the reason there was a decline in underwriting standards was because interest rates were lowered to levels that hadn't been seen in 60 years, which created a mismatch between assets and liabilities of financial entities. Those entities needed yield, and structured products gave them that return. So there was a huge demand for structured products. To fill the structured products, they turned to mortgages. Underwriting standards were lowered to fill the structures which were sold to investors demanding the products because bonds didn't yield enough. And bonds didn't yield enough because the price of fixed income was set too low.
However, the reason there was a decline in underwriting standards was because interest rates were lowered to levels that hadn't been seen in 60 years, which created a mismatch between assets and liabilities of financial entities. Those entities needed yield, and structured products gave them that return. So there was a huge demand for structured products. To fill the structured products, they turned to mortgages. Underwriting standards were lowered to fill the structures which were sold to investors demanding the products because bonds didn't yield enough. And bonds didn't yield enough because the price of fixed income was set too low.