The growth in mortgage lending over the last 20 years is due in part to several factors, some of which arose from imprudent and inadequate regulators:
- The expansion of Fannie Mae, Freddie Mac and Federal Home Loan operations
- The development of the loan securitization market
- Cavalier underwriting criteria (low documentation / no documentation loans)
- The expansion of sub-prime lending
- The marketing of sophisticated loans (adjustable rate mortgages, pay option mortgages, piggy back loans) to under-informed consumers.
- Accommodative monetary policy
- Rating agency lack of sophistication
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