Extend‑and‑Pretend Mortgage Cycles

A recurring policy pattern in U.S. mortgage history is 'extend‑and‑pretend': regulators and institutions repeatedly use accounting forbearance, broadened charter powers, or market engineering to postpone recognition of mortgage losses, which amplifies moral hazard and seeds a later, larger correction. The S&L crisis of the 1980s—Regulation Q, assumable low‑rate loans, securitization, and eventual asset‑quality concealment—is a canonical case that repeats in different forms across decades. — Recognizing 'extend‑and‑pretend' as a systemic public‑policy failure reframes housing debates toward durable institutional constraints (limits on asset scope, stricter provisioning, transparent resolution regimes) rather than episodic bailouts.