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Over-enthusiastic mortgage lending to poor borrowers without risk, because the risk was wisely managed and diversified through perfectly designed, financial, in
by RobertoG 11y ago
Over-enthusiastic mortgage lending to poor borrowers without risk, because the risk was wisely managed and diversified through perfectly designed, financial, innovative products that covered all the bases (for a nice commission, of course).
- retube 11y agoYes but those products (Mortgage backed Securities) are cash products, like a bond or equity, NOT a derivative.
- RobertoG 11y agoDepends on the definition. The wikipedia editors think it is: https://en.wikipedia.org/wiki/Derivative_%28finance%29#Mortgage-backed_securities https://en.wikipedia.org/wiki/Derivative_%28finance%29#Mortg...
- skylan_q 11y agoThe mortgages everything was based on were junk, because they were guaranteed by the GSEs that couldn't handle the rate and size of the defaults on junk mortgages. Everything based on junk mortgages were junk.