> They collapsed because of heavily increasing defaults. And when the borrowers defaulted on their mortgages, the property backing the mortgage went to the hol

> They collapsed because of heavily increasing defaults. And when the borrowers defaulted on their mortgages, the property backing the mortgage went to the holders of the mortgages and got sold off to pay off the MBS holders. Nevertheless, a 1% risk of default does not mean you might lose 1% of your money - it means 1% of the time you are going to lose 100% of your money, and 99% of the time you are going to lose 0%.