Army Staff Sergeant Robert Bales took his first step toward financial ruin while on a second tour of duty in Iraq. The man now accused of killing at least 16 Afghan civilians agreed to repay more than $500,000 in mortgages on two properties he owned in Washington state.

It was 2006, when many Americans thought the rise in home prices would never end. Bales’s wife, Karilyn, was working as a project manager at Washington Mutual, whose later collapse would be the biggest U.S. bank failure in history. The Bales family found subprime lenders who financed their two homes on terms that included balloon payments and floating interest rates starting at 8 percent. - Bloomberg

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