After the real estate company received a loan of 5 million U.S. dollars from Citigroup, it continued to buy buildings and build apartments to expand the scale of the company.

　　 The Citi Investment Department, in accordance with Li Changheng’s instructions, combined premium mortgage contracts with good credit ratings and subprime loan contracts with low credit ratings at a ratio of 3 to 7.

　　 A packaged investment portfolio was sent to an appraisal agency for profitability evaluation.

　　Subprime mortgage is simply a subprime mortgage loan.

　　 And this ‘second’ means a mortgage with low credit and low debt repayment ability.

　　The loan of 5 million US dollars, which accounts for 30% of the new portfolio contract, has minimal risk of repayment and interest repayment, and stable interest income.

　　As long as Citi is willing to sell this contract, there are funds and financial companies in the market. Among Citi’s 8% to 10% of normal loan interest, let Citi eat about 1% to 3% of the interest first, and then take over the contract.

　　 And Citigroup recovered a US$5 million loan from the financial market within a short period of time, and received another 3% interest, and then continued to lend to other customers.

　　 The financial institution that bought this high-quality contract, because it has a mortgage, does not worry about losing money, and can get an interest income of 5% to 7%.

　　 The only thing that needs to be paid is that it will take longer to collect the money.

　　 But for many funds, they are eager to make a profit span in years.

　　The reason is simple. Most pension and insurance funds do not attract customers with high returns, but instead focus on long-term returns, because many seniors prefer stable investments.

　　 Therefore, high-quality loan contracts are extremely popular in the market.

　　 And the hot commodity also means that it is difficult to buy, and even the bank itself is unwilling to sell this kind of contract.

　　As a result, fund managers who need to rely on stable income to maintain fund operations have to consider a risky mortgage portfolio contract consisting of part of the fat and part of the blind box.

　　 Of course, the fund managers are not stupid, but incredibly shrewd.

　　 If Li Changheng wants Wall Street to eat the new combined mortgage contract, he needs a credit rating agency to decorate the contract with his own credit and influence.

　　 For consortia like Citi, the credit rating agency is the easiest one among a series of links.

　　 Don’t look at the four largest rating agencies in the world at this time. They look very tall and magnificent, but they are actually no different from the big law firms and the big media.

　　 If you want to live better and get more rating lists, the institutions ranked third and fourth will always make some compromises because of interest and pressure.

　　 Not to mention the combination contract given to the rating agency this time, in terms of returns and risks, it is not bad.

　　 But after they have rated them more times, if they want to give up, they not only face the risk of reduced profits, but the managers are likely to be kicked out of the company.

　　The rating agencies ranked first and second may just wait for them to give up and then take over.

　　 Because everything on Wall Street is in line with interests, and it’s not illegal to make mistakes in ratings.

　　 Take a closer look at the evaluations given by these rating agencies. Most 3A contracts use the word ‘recommendation’.

　　 In this way, errors are normal.

　　 And if the overall trend of housing prices is to rise, all troubles will be covered by countless speculators and huge turnover.

　　 Before the real outbreak of the subprime mortgage crisis in the future, if it were not for the US housing prices, they would have been in a downward trend for several years.

　　 Even if a crisis would break out, the destructive power would not be that strong.

　　 The rating agency is settled, which is equivalent to the mortgage portfolio contract. Before entering the market, it has gone through some delicious packaging.

　　 But if you really think that the contract can sell, you would be wrong.

　　The contract after the rating, even if it is 3A level, can deceive the rookies in the market, but it will definitely not escape the eyes of the old foxes on Wall Street.

　　 So, someone needs to guarantee the combined mortgage contract, and it is still real money and US dollars as the guarantee.

　　 Li Changheng did not directly send it to the insurance company under the name of Citigroup to guarantee the contract, but sent it to Fannie Mae for review.

　　 As for the reason, the first is that this contract is really not a lie, and the profitability is not much worse than most contracts on the market.

　　 Lee Chang-Heng believes that the contract is sent to Fannie Mae, and Fannie Mae will review it by itself, and after evaluation, it is very likely that he will eat the contract by himself.

　　 is the worst, and I will definitely pay for the insurance premium, and then actively recommend it to the market.

　　 Since 1938, Fannie Mae has been the largest government-sponsored company in the United States and an insurance company for mortgage guarantees.

　　The purpose is only to expand the flow of funds in the secondary housing consumer market. Simply put, it is to make banks more willing to lend to people who need to buy a house.

　　 But the bank is not stupid. If the loan money is not recovered in the form of cash, it will be a loss even if the customer’s house and collateral are taken away.

　　 So in order to stimulate the U.S. housing market and to make more profits for itself, Fannie Mae’s mortgage contract from the bank, as long as the profitability is good and there are no violations, the final insurance review is generally not strict.

　　 And Fannie Mae still holds the right to purchase mortgages that are not guaranteed by the Federal Housing Administration.

This means that Fannie Mae can not only be an insurance company, but also can independently enter the financial market to earn profits~lightnovelpub.net~The mortgage portfolio contract sent by Citigroup, the profit calculated by professionals is between 6% and 7% In between, coupled with the rating certificate of the rating agency, the contract was bought by Fannie Mae before it had time to enter the market.

　　 Then Fannie Mae swallowed about 2% of the proceeds, and turned around and was very aggressive in pushing the new contract to Wall Street.

After Fannie Mae’s hand in hand, because the major financial institutions in the market had insurance, some people soon took over this financial product consisting of a high-quality contract of 5 million 30% and a subprime loan contract of 16.677%. .

　　 Citi took back a loan of 21.67 million U.S. dollars, received 3% interest many years in advance, and transferred the risk.

　　 And in exchange for Fannie Mae to guarantee himself, if something really happened in the future, he will be a qualified backer.

　　 Three days later, Citi Vice President Tyler Garnell, after reading the report handed to him by his confidant, his breathing became a little heavier.

　　 The last thing every bank wants to see, and most worried about, is loan default.

　　 Failure to collect money equals loss. Not only will the interests of banks and shareholders suffer, but the interests of management will also be greatly affected.

　　 Now just by combining them, some shit-like loans and default risks can be transferred to Wall Street and various investment institutions.

　　 Wall Street will transfer these risks to investors, even financial institutions and banks in island countries and Europe.

　　 Money accelerates in circulation, and it will be ordinary people from all over the world who will lose out, but they will fatten up Wall Street.