Politico: The next financial crisis: A collapse of the mortgage system

“The mortgage market is one of the many multiple complexly interconnected pieces of our financial system, so those assurances (note: bank-provided credit facilities) are really important, but I think the role of the government in being a reliable and available source of credit for the mortgage market and mortgage servicers during a crisis is even more important.” — Margaret Liu, Conference of State Bank Supervisors (CSBS) senior vice president and deputy general counsel.

Those in control seem to be busy fighting the last war, applying those lessons learned in blazing speed with insufficient consideration that mortgage servicing is now dominated by non-banks.  What was a very unpleasant drag to returns for the banks in the prior crisis is now an existential threat for the entire system this go-around.