Final answer:
Mortgage bankers are regulated to oversee loans fairly and prevent discrimination, which includes monitoring the loans based on geographic location, sex, and race of applicants.
Step-by-step explanation:
Because mortgage bankers lend their own money, they are regulated to ensure a fair and non-discriminatory lending process, which includes overseeing the loans geographically, as well as by sex and race of the loan applicants. This regulates the risks associated with lending and prevents potential abuses in the mortgage market.
The historic changes in bank regulation aimed to make it cheaper and easier for banks to make home loans; however, the securitization of mortgages and the inadequate intervention by credit agencies and financial regulators have also played a crucial role in the housing market dynamics.
In the past, local banks who made these loans faced the potential of losing money, but with securitization, the risk was off-loaded to investors through mortgage-backed securities.