There are several kinds of risks among bank, Real estate developer and assessment agency in mortgage loan of construction in progress. The risks were respectively analyzed theoretically by the game models based on the experience inductive of reverse selection between bank and assessment agency and moral hazard between bank and real estate developer. Conclusion can be according to the models drawn as following: long-term cooperation should be introduced between bank and assessment agency, D/V should be appropriately set by bank and hence the optimal strategy of bank should be to launch loan.

Using loan-level data, we analyze the quality of subprime mortgage loans by adjusting their performance for differences in borrower characteristics, loan characteristics, and house price appreciation since origination. We find that the quality of loans deteriorated for six consecutive years before the crisis and that securitizers were, to some extent, aware of it. We provide evidence that the rise and fall of the subprime mortgage market follows a classic lending boom-bust scenario, in which unsustainable growth leads to the collapse of the market. Problems could have been detected long before the crisis, but they were masked by high house price appreciation between 2003 and 2005.