Sources of the recent problem With this background in mind, let me turn now to the recent problems in the subprime mortgage market. As is widely known, delinquency rates on subprime mortgages have  BIS Review 126/2007  1  increased sharply over the past year.
The Federal Reserve enforces these rules through oversight of the institutions it examines for compliance with consumer protection laws and regulations. The regulatory scheme for the mortgage industry has become extremely complex as the breadth and depth of this market has grown over the past decade and the role of nonbank mortgage lenders, particularly in the subprime market, has increased.