The reasons that led to the Great Recession of about a decade back, have unfortunately not ebbed away. Conditions remain for another such event occurring again. Mortgage-backed securities or bonds still abound in the open market. This is especially true for the USA where a number of mortgage originators disappear the moment a crisis is discovered. So, beyond the regulation of the documentation, real changes will have to made in the implementation. The housing inflation on right now is a potent reminder of how things became just prior to the previous crisis. Banking needs to restrain itself rather than constantly trying to leverage its business potential. The Consumer Financial Protection Bureau is no longer as effective as it used to be. Some strong regulation is needed which will effect changes from the banks’ corporate strategy level itself.

Source:http://knowledge.wharton.upenn.edu/article/is-the-us-headed-for-another-mortgage-crisis/

Uploaded Date:13 September 2018