From the horse's mouth

In late November 2007 Fitch Ratings issued a report entitled "The Impact of Poor
Underwriting Practices and Fraud in Subprime RMBS Performance". Here is an excerpt from the report summary:

In order to better understand the nature and impact of poor underwriting and fraud on subprime RMBS performance, Fitch analyzed a targeted sample of early defaults from 2006 Fitch-rated subprime RMBS. Fitch’s findings from this review include:
• Apparent fraud in the form of “occupancy misrepresentation.” The borrower’s stated intent was to occupy the property, but there is evidence in the loan files that this did not occur, and that it is likely that occupancy was never the true intent of the borrower.
• Poor or lack of underwriting relating to suspicious items on credit reports. The loan files of borrowers with very high FICO scores showed little evidence of a sound credit history but rather the borrowers appeared as “authorized” users of someone else’s credit.
• Incorrect calculation of debt-to-income ratios.
• Poor underwriting of “stated” income loans for reasonability of the indicated income.
• Substantial numbers of first-time homebuyers with questionable credit/income.
• In one instance, acknowledgement by the borrower of being the “straw buyer” in a property flipping scheme.

What the report does not say is how many of these loans received Fitch's top rating.