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Mortgage Firms Teeter Near Crisis That Regulators Saw Coming

  • Nonbanks may not survive without a government rescue
  • Before virus, firms fought tougher capital requirements
Houses stand in this aerial photograph taken near Mountain View, California.

Houses stand in this aerial photograph taken near Mountain View, California.

Photographer: Sam Hall/Bloomberg
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Nonbank financial firms spent years lobbying against tougher regulation and stricter capital requirements, arguing that their emerging dominance in mortgage lending didn’t pose a risk to the financial system.

Now, many of those companies say they are in desperate need of a bailout to stave off bankruptcy and a potential collapse of the U.S. housing market.