Amid the chaos, the Milken Institute, with the participation of the U.S. Department of the Treasury, hosted a Financial Innovations Lab in October 2008 to explore the roots of the meltdown and consider how to move beyond it. The Lab brought together investors, lenders, brokers, business leaders, government officials, academics, attorneys, ratings agencies, policy advisers, nonprofit organizations, and other experts from the housing finance and capital markets.
"Financial Innovations for Housing: After the Meltdown" details the debate and fleshes out some of the solutions that came out of the Lab and follow-up conversations as this diverse group of experts considered strategies, innovations, and products to help revive and revitalize the mortgage finance market and the housing market in general.
The solutions fall into several categories:
These measures would greatly contribute to rebuilding the housing finance market. Prudent application of financial innovations, supported by proper incentives, will move the market beyond the crisis and improve the system for financing homeownership.