Are you familiar with the phrase “subprime loan”? It means a loan to someone who “may have a difficulty of paying it back”. Thus, a loan that has a really high risk of default.
Underrating the risks on mortgages and/or lying about the risks to the investors is one of the primary causes behind the 2008 financial collapse in the US, triggered by the burst of the housing bubble. That is the crisis that shook the whole world economy, made investors re-evaluate their investments and could even be blamed partly for the current crisis in Europe.