82 M oods and M arkets Further, note how this complexity was not only exacer- bated by the abdication of risk management at the very top, but also how it also lent itself to fraudulent behavior, espe- cially given the peak in trust that naturally accompanied the very top. The fact that the mortgage industry is now subject to record litigation should be a surprise to no one, particularly when you consider the number of participants and transac- tions involved. Novice and Naïve Entrants Given what I am sure were the truly well-intentioned bipartisan public policy objectives of broadening homeown- ership to include more lower and middle class Americans, the fourth peak mood element of novice and naïve entrants was not just satisfied, but all but mandated, by Washington poli- cymakers. Thanks to the abdication of risk management by both lenders and regulators, most often these borrowers were paired with low introductory rate mortgages, which, because of the collapse in short-term rates following 9/11, made hous- ing appear to be affordable for the first time to an entirely new low-credit-score segment of the market. Unfortunately, because credit defaults from the peak--when underwriting criteria are the weakest--backward, these buyers have been the most adversely affected by the housing bubble's collapse. The same is true for the buyers of most subprime mortgage securities, who like the borrowers themselves were also the last to participate. As noted earlier, by the peak in 2005 American home- ownership had risen to a record of almost 70%. In contrast, at the bottom of the Great Depression, the figure stood at