Anatomy of Risk Management Practices in the Mortgage Industry

  title={Anatomy of Risk Management Practices in the Mortgage Industry},
  author={Clifford V. Rossi},
  journal={Capital Markets: Market Efficiency eJournal},
  • Clifford V. Rossi
  • Published 28 May 2010
  • Business
  • Capital Markets: Market Efficiency eJournal
No single factor was responsible for the significant expansion of credit and mortgage products during the period leading up to the mortgage crisis. However, there are indications that greater risk-taking could be attributed to the following factors: An over-reliance on performance metrics not adjusted for risk which would lead management toward riskier products; Data and analytical limitations and blind spots that led risk managers to grossly underestimate; Credit losses; Cognitive biases among… 
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