The Impact of Dodd-Frank Legislation on the Mortagage Market Risk Environment: A Quantitative and Qualitative Examination

Within the last decade, the United States endured what is contemporaneously considered to be the most devastating economic recession since the Great Depression. While a complex array of factors contributed to the downturn, a significant and material contributor was the collapse of the housing market, which was retroactively determined to be in a "bubble", and the devastating after-effects that crippled a "mortgage market…worth more than $10 trillion" (Calhoun). This paper seeks to examine the risk environment present in the mortgage industry both prior to the recession and in the years following. This analysis seeks to do so using quantitative metrics such as foreclosure rates and indices tied to housing performance, evaluate the effectiveness of the provisions of the Dodd-Frank Act specifically related to mortgage reform and the monitoring of the risk environment within related industries. For purposes of scoping, provisions of the Dodd-Frank Act not implemented to regulate the US mortgage market are considered out-of-scope with regard to this analysis.