End-of-Draw HELOCs: Using Data-Enhanced Consumer Outreach to Mitigate Mortgage Portfolio Risk

​Nearly a decade after the collapse of the financial markets, triggered by massive subprime mortgage defaults and plummeting values of securities tied to real estate prices, another major aftershock of the crisis has the potential to impact a significant segment of homeowners. The original crisis created a ~$700B negative equity gap in the financial markets, wiping out many financial institutions and exposing operational shortcomings in the servicing infrastructure of many more, as well as leaving millions of Americans with homes worth less than what they paid originally. In response, the U.S. Treasury initiated unprecedented regulatory reform to stabilize, correct and attempt to prevent an event like this from occurring again. Despite these measures, the next five years may test the financial markets’ resolve and once again threaten the housing market with a new wave of loan defaults.