After the real estate company received a US$5 million loan from Citigroup, it continued to buy buildings and build apartments on its own to expand the company's scale.

The investment department of Citigroup, according to Li Changheng's instructions, combined the prime mortgage contract with a good credit rating with the subprime loan contract with a low credit rating in a ratio of 3 to 7.

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

Simply put, subprime mortgages are subprime mortgages.

And this 'secondary' means a mortgage with low credit and low repayment ability.

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

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

Citigroup, on the other hand, recovered a loan of 5 million US dollars from the financial market in a short period of time, and obtained 3% interest, and then continued to lend to other customers.

The financial institution that bought this high-quality contract can earn 5% to 7% interest income without worrying about losing money because of the mortgage.

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

But for many funds, the span of their longing for profits is calculated in years.

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

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

And the high-demand goods also mean that it is difficult to buy, and even the banks themselves are reluctant to sell such contracts.

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

Of course, fund managers are not stupid, but extremely shrewd.

If Li Changheng wants Wall Street to eat the new combination of mortgage contracts, he needs credit rating agencies to decorate the contract with his own credit and influence.

For consortiums like Citigroup, credit rating agencies are the easiest to handle among a series of links.

Regardless of the fact that they are still the four largest rating agencies in the world at this time, they look very tall on the outside, but they are actually no different from big law firms and big media.

If you want to live a better life and get more rating lists, there will always be people who make some compromises because of interests and pressure in the institutions that rank third and fourth.

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

But if they want to give up after rating too many times, they will not only face the risk of reduced income, but also the risk that managers may be kicked out of the company.

The No. 1 and No. 2 rating agencies might just wait for them to give up and take over.

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

Take a closer look at the evaluations given by these rating agencies, most of the 3A contracts use the word "recommendation".

In this way, mistakes are normal.

Moreover, if the overall trend of housing prices is rising, all troubles will be covered up by countless speculators and huge turnover.

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

Even if the crisis will break out, the destructive power will not be so strong.

After getting the rating agency done, it is equivalent to the mortgage portfolio contract. Before entering the market, it has gone through some delicious-looking packaging.

But if you really think that the contract can sell well, you are very wrong.

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

Therefore, next, someone needs to guarantee the combined mortgage contract, and the guarantee is real gold and silver in U.S. dollars.

This time 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 indeed not deceiving, and its profitability is not much worse than most contracts on the market.

Li Changheng believes that the contract will be sent to Fannie Mae, and Fannie Mae will review and evaluate it by itself, and it is very likely that Fannie Mae will take the contract by itself.

In the worst case, you will definitely eat the insurance premium with satisfaction, and then actively recommend it to the market.

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

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

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

Therefore, in order to stimulate the housing market in the United States and to obtain more profits for itself, Fannie Mae is generally not strict in the final insurance review of the mortgage contracts sent by banks, as long as the profitability is good and there are no violations.

And Fannie Mae held the right to buy mortgages that weren't insured by the FHA.

That is to say, Fannie Mae can be an insurance company, and can independently enter the financial market to earn benefits.

The mortgage portfolio contract sent by Citigroup has a profit calculated by professionals between 6% and 7%. With the rating certificate of a rating agency, the contract was bought by Fannie Mae before it entered the market. down.

Then Fannie Mae swallowed about 2% of the proceeds, and turned around to push new contracts to Wall Street very aggressively.

And after Fannie Mae passed such a hand, major financial institutions in the market, because of their insurance, soon took over this financial product consisting of 5 million 30% high-quality contracts and 16.67 million 70% subprime contracts. .

Citigroup recovered a loan of 21.67 million US dollars~lightnovelpub.net~ and got 3% interest many years in advance, and transferred the risk out.

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

Three days later, Taylor Garnell, vice president of Citigroup, was breathing heavily after reading the report handed to him by his confidants.

The last thing every bank wants to see, and what they worry about the most, is loan default.

Failure to recover the money equals a loss, and not only the interests of the bank and shareholders will be damaged, but the interests of the management will also be greatly affected.

Now just by combining them, some **** 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.

With the accelerated circulation of money, ordinary people from all over the world will suffer in the end, but Wall Street will be fattened.

Please remember the first domain name of this book: . :