How the Great Recession Has Affected Mortgage Securitization, Servicing, and Homeownership

Abstract

At this juncture, five years after the financial crisis and during a still-slow recovery from the Great Recession, there have been significant changes in the mortgage underwriting, securitization, and servicing processes to reduce credit risks and increase protections for certain consumers. At the same time, an unintended consequence has been a reduction in homeownership, particularly among certain minority and low-income groups, and there is confusion, disagreement and misunderstanding over whether and why the federal government should be pursuing the goal of increased homeownership. This article sheds light on changes that have taken place in the mortgage industry, how homeownership has suffered, and why homeownership is a goal worth pursuing.