It turns out that high-risk mortgages can hurt both borrowers and lenders. Over the years we've seen innovation in mortgage products. Banks figure out ways to loan money, and they find ways to keep the money flowing. In many cases, the borrower takes on risks that may not be appropriate.
These days, the banks are also paying a price for risk. Several banks have announced major losses related to mortgage loans, and Citigroup is one of the latest casualties. CEO Chuck Prince is moving on, and the bank announced further losses related to bad mortgages late yesterday.
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