1 These declines may have reversed much, or perhaps all, of the earlier overvaluation. Notwithstanding this correction, all indications are that the softness in housing activity is likely to persist for some time. In normal times, population growth and the attendant formation of new households tend to support housing demand.
In general, the originate-to-distribute model breaks down the process of credit extension into components or stages – from origination to financing and to the postfinancing monitoring of the borrower’s ability to repay – in a manner reminiscent of how manufacturers distribute the stages of production across firms and locations.