Spring 2008 Vol. 33, No. 1
Abstract: The impact of defaults in the residential subprime mortgage loan market has leeched into global credit markets. Market makers from New York to Los Angeles pooled these and other rated collateralized debt obligations into highly complex investment securities and sold them to Wall Street investors (both individuals and firms). Although the growth in commercial mortgage-backed securities pooling slowed in 2007, the commercial market now finds that it is an unintended victim of the underwriting failures of the residential sector.