Editorial: On the Bright Side.(Editorial)

As the industry heads into the MBA's annual convention, there will be a lot of focus on the challenges facing the real estate finance sector.

But while 2007 may seem like the worst of times in some ways, it's time to reflect that despite the industry shakeout - especially in the subprime sector - America's housing finance system remains fundamentally sound. The U.S. remains one of the few places where homebuyers can obtain long-term, fixed-rate financing on relatively cheap terms. And while underwriting has been tightened and investors are shunning some of the more risky products and credit grades, consumers still have a wide variety of choices in how they finance a home purchase.

That's good for the country. It's also a testament to how important the mortgage servicing system is to maintaining America's high rate of homeownership.

Despite all the gloomy news and the failure of many mortgage companies, housing finance remains a good business to be in. Demographics suggest that while the rate of growth in mortgage debt outstanding has slowed, it's long-term growth rate, fueled by demographics, will continue to outpace inflation and general economic growth, according to many economists. Moreover, ...