The "exotic" mortgage instrument of recent years is exemplified by the

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The "exotic" mortgage instrument of recent years is commonly known as the "negative-amortization" mortgage. This type of mortgage allows the borrower to make smaller monthly payments than what is required to fully pay off the loan. However, the unpaid interest is added to the principal balance, resulting in a larger amount owed over time. This type of mortgage was popular in the years preceding the 2008 financial crisis and is considered a risky and unsustainable form of lending.

The "Exotic" Mortgage Instrument of Recent Years Is Exemplified by the