> Is this not quite risky for banks? Not that banks taking a risk is bad, but it seems a very long bet for them. Not really. Mortgages are (mostly) bundled and

> Is this not quite risky for banks? Not that banks taking a risk is bad, but it seems a very long bet for them. Not really. Mortgages are (mostly) bundled and on-sold to investors which assume the risk of default and interest rate changes. The originating bank collects are premium for the loan and moves on to the next one.