Interesting series of articles about the mortgage bubble that was fed by sub-prime and high-risk loans. Articles shows how lenders have been able to unload high-risk / sub-prime loans by re-packaging loans into different financial instruments such as bonds. This has encouraged lenders to take on more risking loans. Now that many home owners with sub-prime and ARM loans are defaulting, investors in these types of loans are realizing how risky their investment is in mortgage market.
Digg.com posts, “Part 1) The buyers: The Quams and the too-good-to-be-true mortgage, Part 2) The brokers: Would you get your mortgage from this man?, Part 3) The appraisers: Price estimates made to order… and for the final act: The investors: How to get rich trading “idiot” loans. A great overview of how we got into this housing mess from Money Magazine.”