Banks Sold Risky Subprime Mortgages to Uninformed Investors Before 2007 Crisis.
Depository institutions sold risky subprime mortgages to uninformed investors before the 2007 crisis. By analyzing data on loan delinquency and sales, researchers found that banks sold mortgages with higher risks to investors who didn't know about these risks. This behavior, known as "cream-skimming," was common during the subprime lending boom.