Five years after the great crash, and more than two years into the supposed recovery of the housing market, lenders are still navigating a rocky course with many dangerous obstacles ahead, warned Paul Pouliot, first vice president of the Federal Home Loan Bank of Boston.

Pouliot spoke at the Mid-Year Mortgage Update and Conference held Wednesday in Woburn, sponsored in part by The Warren Group, publisher of Banker & Tradesman.

"It’s been five years since we entered the abyss of this recession … over the past few years we have seen an abundance of laws and regulations passed to curb the worst of the excess," declared Pouliot, but problems remain.

Though new FHFA director Mel Watt has introduced some reforms that have provided some relief to the lenders and the GSEs, high loan guarantee fees, fear of buybacks and the unhealed wounds of the crisis still plague the mortgage market, keeping private investors on the sidelines.

In particular, the impasse between lenders and investors on the issue of "reps and warranties" – the contractual terms which define the difference between bad and good loans, and which party in the contract will be forced to absorb the loss if a loan defaults – is still making investors wary. The lack of private capital willing to enter the market is in turn tempting Congress to dither when it comes to fundamentally reforming the government-sponsored entities Fannie and Freddie.

"Congress has not been able to embrace one concept, and uncertainty continues to this day," said Pouliot.

But even through Congress is refusing to settle on a solution, the industry must march on, said Pouliot, saying this year will be a watershed year for mortgage originators as they try to adjust to all the new regulations. Pouliot said he was confident that the industry would be able to adapt.