We Have Learned Nothing From The Mortgage Market Meltdown

In the decade before the 2008 financial crisis household debt increased greatly while the quality of the borrowers declined. Mortgage originators reduced required down payments, required less proof of credit worthiness, and approved less qualified borrowers. This worked because they made money on the volume, not quality or loans, and suffered no losses because all the loans were bundled and resold before any could go into delinquency or default. In the aftermath, hindsight made clear that the incentives in the mortgage market were almost designed to create such a crisis. Regulators and Congress set out to prevent a recurrence of the subsequent mortgage market meltdown. Yet government complet

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