Seven Simple Lessons on the Mortgage Crisis from Two Actuaries

We have been observing the mortgage crisis over the recent months. To some extent, we are like Will Rogers in that all we know about the crisis “is what we read in the newspapers.” Even though we lack the practitioner’s in-depth knowledge of the mortgage industry, it does seem to us that lessons we have learned in the property-casualty insurance industry have relevance to the mortgage crisis. These seven lessons—based on admittedly imperfect understanding of the exact structure of the underlying mortgage industry—are included within.