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This article describes the development of mortgage markets in the United States in the twentieth century, with an emphasis on the growth of high-risk market segments beginning in the 1990s. It focuses on the federal role in the development of stable, risk-limiting products and markets. The author then examines the growth of securitization, including structured finance and its impact on mortgage markets. Finally, the article discusses the policy debates and developments surrounding subprime and other high-risk mortgage lending from the 1990s through the 2007-2008 mortgage crisis. The author concludes that knowledge of the problems and costs of high-risk lending had a minimal impact on policy making and that mortgage markets are not well served by a deregulationist paradigm.


Originally published in:

Immergluck, D. (2009). Private risk, public risk: Public policy, market development, and the mortgage crisis. Fordham Urban Law Journal 36, no. 3: 447-488.

(c) The author.