Securitization Process Source:Ashcraft and Schuermann (2008 4.Moral Hazard Borrower 1.Predatory Lending Originator Warehouse Lender 2.Mortgage Fraud Arranger Credit Rating Agency 3.Adverse Selection Servicer Asset Manager 6.Principal Agent 5.Moral Hazard Investor Figure I.Key Players and Frictions in Subprime Mortgage Credit Securitization 7.Model Error11 Securitization Process Source: Ashcraft and Schuermann (2008)