Many analysts believe that problems in the U.S. housing market initiated the 2008-2010 global financial crisis. In this regard, the subprime mortgage crisis (SMC) shook the foundations of the financial industry by causing the failure of many iconic Wall Street investment banks and prominent depository institutions. This crisis stymied credit extension to households and businesses thus creating credit crunches and, ultimately, a global recession. This book specifically discusses the SMC and its components, causes, consequences and cures in relation to subprime loan extension and securitization, risk and regret, data as well as bank bailouts. In particular, the SMC has highlighted the fact that risk, credit ratings, profit and valuation as well as capital regulation are important banking considerations. With regard to risk, the book discusses credit (including counterparty), market (including interest rate, basis, prepayment, liquidity and price), tranching (including maturity mismatch and synthetic), operational and systemic risks. The book introduces the IDIOM hypothesis that postulates that the SMC was largely caused by the intricacy and design of subprime loan extension and securitization that led to information problems (dispersion and asymmetry), opaqueness and ineffective risk mitigation. It also contains appropriate examples, discussions, timelines as well as appendices about the main results on the aforementioned topics. Numerous references point to the material not covered in the book, and indicate some avenues for further research. In order to understand the key results a working knowledge of discrete-time stochastic modeling and optimization is required. The book is one of the first to approach the SMC from a mainly theoretical- rather than a numerical-quantitative or qualitative viewpoint. It is primarily intended for financial industry role players, researchers as well as students and staff at academic institutions.