Subprime mortgage
Housing loans made to borrowers with poor credit histories or without documented income.
How to read the number
They were written on the assumption of rising house prices: the collateral was meant to outgrow the debt, and refinancing stood in for checking whether the borrower could pay.
When the metric lies
The risk was assumed to be spread across the country: the models allowed for prices falling in individual states, but not for the whole housing market falling at the same time.
Also known as: subprime lending