Counter party is either stupid, careless, on it or forced. I think often there is intermediaries involved. Say real estate investment fund. For which on paper in short term numbers looking good is enough. And in past environment as long as there was enough money coming in the ponzi could continue to run.

And other parties further can be say pension funds, which on paper are forced to search for anything that make their goals look good enough. Thus not doing enough due diligence.

Everything is fine until it is not. And this has been seen time after time.