Keeping Credit Flowing to Consumers in Need

The credit crunch and subsequent collapse of the nonprime mortgage market claimed many victims, including hundreds of thousands of low- and moderate-income Americans who lost their homes and savings. Today, regulators and policymakers are debating ways to reform the housing finance industry and strengthen consumer protections.

The risk they run is that too stringent regulation could make it harder for borrowers in need to get money. In today's challenging economic climate and with high unemployment, "many Americans borrow to live," notes Nicolas P. Retsinas, a senior lecturer in real estate at Harvard Business School, and director emeritus of Harvard's Joint Center for Housing Studies. In addition, the American economy depends on consumers having access to credit. "The challenge is to avoid the temptation of overcorrecting," he says.

To begin to study some of these issues, the Joint Center held a symposium in February 2010 on Moving Forward: The Future of Consumer Credit and Mortgage Finance." A new book, co-edited by Retsinas and Eric S. Belsky, managing director of the Center, collects papers presented at the symposium that deal with, among other topics, rebuilding the housing finance system, the credit needs of low-income consumers, mortgage finance alternatives, and the regulation of consumer financial products.