As the mortgage and housing markets continued to decline in 2008, state and federal legislators have increased regulation of those markets in an attempt to save homeowners from foreclosure and further restrict subprime and predatory lending practices. With this has come still further reductions in lending activity. With the number of foreclosures around the country increasing, legislation requiring lenders and servicers to work with borrowers in finding alternatives to foreclosure has also increased. Additionally, regulation and legislation limiting the availability of subprime mortgage products and the features of such products have increased significantly. This type of legislation, together with the secondary market becoming increasingly cautious in purchasing such loans, results in reduced access to credit and a decrease in the availability of subprime products.122 With uncertainty as to when the mortgage and housing markets will begin to rebound, it is likely that state and federal legislation limiting foreclosure practices and subprime mortgage products will continue in the months to come, reinforcing these adverse trends.
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