The future viability of the savings association industry in traditional mortgage lending has been questioned because of

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Each option listed contributes to the challenges and uncertainties facing savings associations in traditional mortgage lending. The securitization practices of other FIs have reduced the need for banks and thrifts to hold long-term mortgage loans on their balance sheets. The additional risk exposure of long-term mortgage lending means that savings associations are exposed to interest rate risk, credit risk, and liquidity risk. Intense competition from other FIs has led to decreasing profit margins and a reduction in market share. Finally, the liquidity risks associated with mortgage lending mean that savings associations must have sufficient cash and liquid assets to cover unexpected withdrawals and interest rate changes. All of these factors combine to raise questions about the future viability of the savings association industry in traditional mortgage lending.

The Future Viability of the Savings Association Industry in Traditional