Question by Arrow: Can someone explain this in an easier way.?
I don’t really get this statement:
Excessive lending under loosened underwriting standards, which was a hallmark of the United States housing bubble, resulted in a very large number of sub prime mortgages. These high risk loans had been perceived to be mitigated by securitization. Rather than mitigating the risk, however, this strategy appears to have had the effect of broadcasting and amplifying it in a domino effect.
Best answer:
Answer by Books
It’s saying that money was loaned to people who couldn’t afford to pay it back. The loans were sold to investors to spread the risk. The amount was so great that spreading the risk by selling the loans to other investors just caused greater damage.
Give your answer to this question below!
