How does securitization fraud impact the mortgage lifecycle?
How does securitization fraud impact the mortgage lifecycle?
Securitization fraud disrupts the mortgage lifecycle by introducing false information about loan quality and risk, leading to substandard loans being originated. This affects borrowers, investors, and the financial system at large, as it can result in increased defaults and financial losses. Additionally, the mistrust created by securitization fraud can impede the flow of credit in the mortgage market, making it more difficult for qualified borrowers to access financing for home purchases or refinancing, thus altering the dynamics of the entire mortgage lifecycle.