Mortgage backed securities


Banks specialize in risk management. These banks invested heavily in mortgage backed securities expected fairly high returns from these highly rated financial instruments However, banks did not expect the credit crisis of 2008-2009 and the default rates due to declines in housing prices causing people to owe more than the house was worth. What are some lessons learned due to the subprime mortgage situation? Provide at least one link to information supporting your opinion.

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Finance Basics: Mortgage backed securities
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