Favorable ratings from these three credit agencies were crucial for the successful sale of the securities based on subprime residential mortgages and other debt obligations. The sales of these bonds, in turn, were an important underpinning for the fifi nancing of the self-reinforcing price-rise bubble in the . housing market. When house prices ceased rising in mid 2006 and then began to decline, the default rates on the mortgages underlying these securities rose sharply, and those initial ratings proved to be excessively optimistic. The price declines and uncertainty surrounding these widely-held securities then helped to turn a drop in housing prices into a widespread crisis in the
