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FINANCIAL CRISIS INQUIRY COMMISSION REPORT
program, Bair said some originators appeared willing to participate. But the Wall
Street firms that securitized the loans resisted, saying that they were concerned about
possible liability if they did not adhere to the proposed best practices, she recalled.
The effort died.
Of course, even as these initiatives went nowhere, the market did not stand still.
Subprime mortgages were proliferating rapidly, becoming mainstream products.
Originations were increasing, and products were changing. By , three of every
four subprime mortgages was a first mortgage, and of those were used for refi-
nancing rather than a home purchase. Fifty-nine percent of those refinancings were
cash-outs, helping to fuel consumer spending while whittling away homeowners’
equity.
