A number of investors failed to do their own due diligence and instead relied too much on credit ratings as a measure of the overall risk in holding these complex debt instruments. Among other things, they failed to take into account risks other than credit risks, in particular, market and liquidity risks.
The complexity of these instruments frequently made them opaque, and too often investors put their money and confidence into vehicles that they did not fully understand. The basic loan quality of U.S. subprime mortgages worsened through 2005 and 2006, although this worsening did not become broadly apparent to the investors in securitized mortgages until the first half of 2007.