Which statements belong in the summary? Check all that apply.

$1)$The total amount of risk embedded in the securities created by bundling mortgages did not change. The securitization and resecuritization processes led to a distribution of total risk among different types of collateralized securities$.$

$2)$ Borrowers who met certain requirements for mortgages, such as minimum income level relative to the total mortgage amount, could obtain mortgages that were qualified to be securitized$.$ Such mortgages were called subprime, or Alt$-$A$,$ mortgages.

$3)$From a borrower$$s perspective, adjustable$-$rate mortgages $($ARMs$)$ are considered riskier than traditional fixed$-$rate mortgages, because mortgage payments might increase without an increase in income.

$4)$ Securitizing companies, such as Merrill Lynch$,$ Bear Stearns, and Lehman Brothers, were making money on the volumes of mortgage pools that they were securitizing$.$ This encouraged originators to issue more mortgages and increase the total value of the mortgages.

Analysts and theorists have debated over the different factors that caused the subprime mortgage meltdown. According to your understanding of the crisis, which of the following factors led to the financial crisis? Check all that apply.

$1)$ Home buyers opted for traditional fixed$-$rate mortgages to avoid any payment delinquency.

$2)$ Credit default swaps claimed to insure CDOs.

$3)$ Regulations were relaxed, leading to nonq

$4)$ Mortgage brokers did not verify borrowers carefully.