Dallas, a trim 51-year-old who has been in the mortgage business for more than 25 years, said he disagreed, but complied. “If I can sell it at a profit,” he said, “why would I not do it?” A spokesman for Merrill Lynch denied Dallas’ assertions, but declined to elaborate. Mortgage companies like Ownit grew quickly last year by making it easier for homebuyers to take out loans without proving their incomes or making down payments. In retrospect, it was exactly the wrong time to ease credit: interest rates were rising and home prices were cresting after a sharp four-year rally. Many in the industry also suspected that speculation and fraud were rampant in many hot real estate markets on the coasts and in the Southwest. There is no doubt that the standards in the subprime market deteriorated sharply last year. More than 44 percent of all subprime loans in 2006 were based on limited documents or none at all, up from 38 percent in 2004, according to Lehman Brothers. More than 26 percent of borrowers took out a second mortgage, indicating that they did not have enough savings for a full down payment, up from 14 percent. But Tom Marano, who heads the mortgage business at Bear Stearns, disputed the contention that Wall Street pressure led to the loosening of credit standards. Investment banks, he said, do not directly make many loans. “If enough independent companies set standards, that becomes the market,” he said. “Wall Street’s role is largely one where we assess risk, we purchase loans.” Wall Street, however, is now wading more directly and deeply into the business. Big banks and hedge funds are buying up bankrupt or ailing mortgage companies that did not have enough capital to weather the downturn. These bigger financial players and more diversified lenders like Countrywide Financial may well inherit the subprime business. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AGOURA HILLS – Visitors to Ownit Mortgage Solutions’ offices here are met by an unmanned reception desk and three dying potted plants that appear to have gone months without water. How appropriate. Ownit filed for bankruptcy protection late last year; since then, several companies that specialized in loans to people with weak, or subprime, credit have followed it into bankruptcy as the once-thriving business has withered on the vine. Gone are the lavish parties and the extravagant trips and the executive salaries and sales commissions that routinely topped a million dollars. Lenders like New Century Financial and Ownit, many of them based in Southern California, have cut an estimated 12,000 mortgage jobs in the state since the start of 2006, according to MortgageDaily.com, a trade publication. Nationally, 16,000 jobs have been lost. What used to be a profitable partnership between subprime lenders and Wall Street banks has now degenerated into a cross-country blame game. Lenders in California say big investment banks encouraged and pushed them to make risky loans. On Wall Street, bank executives say mortgage lenders became sloppy and did not pay enough attention to fraud. Whatever the cause, Ownit provides a vivid example of what went wrong. William D. Dallas, the founder and chief executive of Ownit, acknowledges loosening lending standards but says he did so reluctantly and under pressure from his investors, particularly Merrill Lynch, which wanted more loans to package into lucrative securities. He recalls being asked to make more “stated income” loans, in which lenders do not verify the information provided by borrowers and brokers with tax returns, pay stubs or other documentation. The message, he said, was simple: You are leaving money on the table – do more of them.