While most of these sub prime borrowers have in fact been servicing their loans quite adequately, flaws in the process saw standards slip towards the end of this cycle. As the problems came to light, pressure came to bear on various entities.
Institutions with exposure to sub prime mortgage assets, holders and intending issuers of structured products in general, SIVs, conduits and other intermediaries that relied on wholesale funding were all tested. Core banking institutions that sponsored off balance sheet entities very quickly found funding pressures transferred back to them.