The subprime crisis in the United States is neither a subprime crisis nor a subprime debt crisis. Its full name should be "subprime mortgage securitization crisis", which can be seen literally. The key to understanding this crisis lies not only in "subprime mortgage" but also in "securitization".
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Asset securitization has developed rapidly in the United States since 1990s, and it has also been applied to the subprime mortgage market in the United States. Note that "sub-optimal" refers to borrowers whose credit is lower than "excellent", that is, borrowers whose FICO credit score is lower than 640.
Asset securitization is a lever operation. The leverage ratio (total assets/net assets) of financial institutions that usually implement asset securitization (from mortgage companies to investment banks and other related financial institutions) is very high, especially financial institutions that issue mortgage debt bonds and credit default swaps, in order to achieve the goal of small and broad.
There are serious defects in the design and pricing of credit asset securitization products. In the process of asset securitization of subprime mortgage, institutions have created obscure, opaque and incomprehensible derivatives "freaks" because of technical difficulties, market and human factors.
After the crisis broke out, Geithner, then chairman of the Federal Reserve Bank, said, "Nobody knows who owes who what" (nobody knows who owes how much).
Baidu Encyclopedia-Subprime Mortgage Securitization