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With regard to subprime loans, I can understand that the financial insitutions knew they were probably going to stiff the borrowers, or at least many of them when the teaser loans expired, but why did they think they wouldn't get caught in the fire?

Also I thought the financial insitutions packaged these subprime loans and sold them to investors. If so, why are the financial loan companies getting caught holding the bag? Did liability remain with the originator institutions?


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