All of the above are examined in a working paper by Oren Bar-Gill in LAW & ECONOMICS RESEARCH PAPER SERIES, WORKING PAPER NO. 08-59.
Excerpt from introduction.
During the five years preceding the crisis, the subprime market experienced staggering growth as riskier loans were made to riskier borrowers.3 Not surprisingly these riskier loans came at the price of higher interest rates, which compensated lenders for the increased risk that they undertook. But high prices themselves are not the central problem; the problem is that these high prices were hidden by lenders and underappreciated by borrowers. In the prime market, the traditional loan is a standardized 30-year fixed-rate mortgage (FRM). Lenders could have accounted for the increased risk of subprime loans by simply raising the interest rate on the traditional FRM. Yet the typical subprime loan is a far cry from an FRM. The subprime market boasted a broad variety of complex loans with multidimensional pricing structures.
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