What role do regulatory bodies play in preventing and addressing securitization fraud in the mortgage industry?

Regulatory bodies play a crucial role in preventing and addressing securitization fraud in the mortgage industry by enforcing compliance with laws and regulations governing loan origination, securitization, and disclosure. They set standards for transparency, risk management, and underwriting practices, aiming to deter fraudulent activities. Regulatory oversight includes conducting audits, examinations, and investigations to identify and address potential fraud. Additionally, these bodies may impose penalties, sanctions, or legal actions against entities found engaging in fraudulent practices, thereby promoting market integrity and protecting investors' interests.