It also held tens of billions of dollars worth of mortgage securities on its books, which proved to be its downfall. (cnbc.com)
It got into trouble by selling guarantees on mortgage securities that forced it to pay billions of dollars after the subprime mortgage bubble burst in 2007. (baltimoresun.com)
It all boils down to the increase in margin and decrease in demand for mortgage securities (forced asset sales?). (alephblog.com)