Why Did the Mortgage Crisis Happen, Part 3
Submitted by Businomics Blog
Previously, I posed the question of why the crisis emerged when it did, then I explained the role of the Great Moderation. Now I talk about how securitization formed a building block of the crisis.
The second factor enabling the mortgage mess was securitization. The first securitized mortgage transaction took place in February 1970, but primitive computers were not up to the many flavors of securitization that would eventually arrive. As the housing market boomed, securitization took off.
