Lead Article
By Peter Harvey
founder and CEO, Intellidyn Corp.
Illustration: Keith Negley
How Legislation Recast
the Mortgage Industry
FEWER PLAYERS, MORE DEMAND — SUCH IS THE POTENTIAL
NEW WORLD CREATED VIA GOVERNMENT INTERVENTION
Jumbo ARMs. Piggyback loans on
homes with inflated values. No-doc
and low-doc loans. These factors are
just a few that likely contributed to
the “implosion” of the industry.
Some still wonder how this hap-
pened. But industry veterans are
clear as to why: There was a combi-
nation of sloppy internal compliance,
loose guidelines and intense pressure
to provide mortgages to Wall Street
as mortgage-backed securities.
While various legislative initiatives
gained their typically slow momen-
tum as the problem swelled through
2008, many of the industry’s primary
players — banks, mortgage brokers
and mortgage lenders — started to
rebuild their businesses. The rebuild-
ing, in part, has been encouraged by
legislation — most notably, the Hous-
ing and Economic Recovery Act of
2008, passed in July, along with other
government initiatives. »
