that. The idea was that housing prices would keep rising, so the borrower would just refinance the mortgage two

years in the future, and thus would not ever have to make the higher payments. Some banks even offered so-called

NINJA loans, which meant a financial institution issued a loan even though the borrower had no income, no job, nor

assets.

In retrospect, these loans seem outlandish. Many borrowers figured, however, that as long as housing prices kept

rising, it made sense to buy. Many lenders used a process called “securitizing,” in which they sold their mortgages to

financial companies, which put all the mortgages into a big pool, creating large financial securities, and then re-sold
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