Collateral Matters: Housing Code Compliance in the Mortgage Crisis
Lind, Kermit J.
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This article begins by describing the paradigm shift in mortgage loan servicing produced over the past two decades by securitization and exotic financing products using residential property for collateral. It shows how current mortgage servicing and debt collection practices ignore mortgage collateral and renders conventional housing code compliance procedures obsolete. It then suggests that new strategic thinking is needed to redesign and retool code compliance processes. Residential neighborhoods and communities need to protect themselves against the wanton lending and servicing practices produced in the wake of the mortgage disaster. There is still immanent disaster not only from the new financial practices but also from some of the policies and programs initiated at the national level to protect big financial institutions from the consequences of their mortgage madness.