It starts with mortgage. Many Americans borrowed money to buy their own house. After the crash of the dotcom bubble in 2000s many countries including US were facing economic recession. To spur growth, they lowered interest rates. Everybody were lending …

Tags: CMO, Collateralized Mortgage Obligation, Fannie Mae, freddie mac, lehman brothers, Lewis S. Ranieri, MBS, Mortgage, mortgage crisis, Mortgage-Backed Securities, Salomon Brothers, securitization, Washington Mutual

A subprime loan typically has a higher interest rate than other loans because the people who need it usually have a poor credit history or very low credit score. These high interest loans do make people pay a lot more …

Tags: AIG, Citibank, credit score, fannie may, freddie mac, HSBC, lehman brothers, merrill lynch, Subprime mortgage