One of main reasons why lenders and borrowers in the sub-prime mortgage market were willing to exchange risky loans prior to the 2008 financial crisis in the U.S.was

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Lenders and borrowers in the sub-prime mortgage market were willing to exchange risky loans prior to the 2008 financial crisis in the U.S. because they expected higher housing prices. This expectation led to the belief that riskier loans would be profitable in the future when home prices increased. However, when housing prices began to decline, many borrowers defaulted on their loans, leading to the collapse of the sub-prime mortgage market.

One of Main Reasons Why Lenders and Borrowers in the Sub-Prime