An even greater support to the economy than cash-outs last year was the extraction of home equity associated with a record 6.4 million existing home sales, including condos, at record prices. This pace of ownership turnover of the existing housing stock also reflected the near-record-low mortgage rates. We estimate that mortgage originations for existing home purchase last year topped $ billion.
While the board takes overall responsibility for the direction of the business, the senior management should ensure that a bank’s activities are consistent with the business strategy, risk appetite and policies approved by the board. An especially important responsibility of senior management is to ensure that there are appropriate systems for managing risk, including a comprehensive and independent risk management function.