and buy their house, which would continue to grow in value (P. Wissén, U. Wissén, 2011).
Shortly one could say that it wouldn't matter if the loaner wouldn't be able to pay back the
loan since the house value would cover the loan. This was not what happened; instead, the
bubble of the inflated house prices exploded and the values of the houses dropped sharply
(P. Wissén, U. Wissén, 2011). The subprime mortgage crisis was a fact.
These subprime loans had often been been a part of CDOs, which also consisted of other,
safer bonds/loans, giving the CDO a high rating. The CDOs then was sold to other investors,
who sold it to other banks, and so it went on. Everything was fine, as long as the subprime
loaners were working and their houses continued to increase in value. But as soon as the
subprime mortgage crisis occurred, everything changed. The CDOs had been sold all over
the globe and this could now affect everyone (P. Wissén, U. Wissén, 2011).