The collateralized debt obligation in particular enabled financial institutions to obtain investor funds to finance subprime and other lending, <answer>extending or increasing the housing bubble</answer> and generating large fees. This essentially places cash payments from multiple mortgages or other debt obligations into a single pool from which specific securities draw in a specific sequence of priority. Those securities first in line received investment-grade ratings from rating agencies. Securities with lower priority had lower credit ratings but theoretically a higher rate of return on the amount invested.
What was the outcome of collateralized debt obligations?
extending or increasing the housing bubble