Mortgage Securitization: Moral Hazard and Sub-prime Mortgage Crisis

It is undeniable that the U.S.mortgage securitization operation mechanism has some advantages,and it has also played a great role in promoting the U.S.economy.However,the risk in the course of securitization and its impact on financial stability is an issue of concern.Takeout of sub-prime mortgage crisis has made all the problems in the operation of the securitization gradually exposed.An analysis is made on the behavior of related participating entities in the course of mortage loan securitization,exploring the root causes for the enlarged credit risk in the entire housing finance market,it's held that formation of sub-prime mortgage crisis in the United States risk should be attributed to the moral hazard from the lending institutions and credit rating agencies,and that interest rates rising is only an incentive to the crisis.