Continued Growth and Lower Standards
The private mortgage securitization market continued to grow, and by 2004, had overtaken government/GSE mortgage backed securities issuance. (This is false, based on the cited source -- the rate of private securitization overtook the GSE rate in 2005. Total private issuance never overtook total GSEissuance) Private MBS grew primarily by lowering their standards and securitizing more low quality, high risk mortgages such as Alt-A, and subprime mortgages. Scholars have argued that this relaxation of standards was due to greater competition between securitizers for loans, and greater market power for loan originators. GSEs also relaxed their standards in response, but GSE standards remained higher than private market standards, and GSE securitizations continued to perform well compared to the rest of the market.
Read more about this topic: Residential Mortgage-backed Security
Famous quotes containing the words continued, growth and/or standards:
“The protection of a ten-year-old girl from her father’s advances is a necessary condition of social order, but the protection of the father from temptation is a necessary condition of his continued social adjustment. The protections that are built up in the child against desire for the parent become the essential counterpart to the attitudes in the parent that protect the child.”
—Margaret Mead (1901–1978)
“The windy springs and the blazing summers, one after another, had enriched and mellowed that flat tableland; all the human effort that had gone into it was coming back in long, sweeping lines of fertility. The changes seemed beautiful and harmonious to me; it was like watching the growth of a great man or of a great idea. I recognized every tree and sandbank and rugged draw. I found that I remembered the conformation of the land as one remembers the modelling of human faces.”
—Willa Cather (1873–1947)
“In this nation I see tens of millions of its citizens, a substantial part of its whole population, who at this very moment are denied the greater part of what the very lowest standards of today call the necessities of life. I see one third of a nation ill-housed, ill-clad, ill-nourished. The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have too little.”
—Franklin D. Roosevelt (1882–1945)