APRA executive Heidi Richards floored readers of her speech for a Sydney forum on Friday, in which she asserted that "we have never had a real housing market downturn in this country, at least not since the advent of the modern era of mortgage banking or the significant growth in the share of this lending for Australian ADIs."Speaking at the Macquarie University Financial Risk Day, Richards added that "historical data or models are not very good guides to tell us how a future downturn might evolve."More cynical observers recall real housing market downturns.In the reporting life of Banking Day's managing editor the telling episode is the Gold Coast and Queensland housing crash of 1986, one echoed two decades later amid the national experience of a global banking crisis.This regional price smash produced industry-wide losses on residential loans and a degree of stress on parochial Queensland ADIs.This housing market downturn claimed one financial victim.Profits at the Australian government owned Housing Loans Insurance Corporation took a battering; HLIC's presence as a pillar of reliability having encouraged risk taking by mortgage funders.This wobble slotted right into the fashion for privatisation of government owned corporations and HLIC made a hit list endorsed by cabinet in 1989.Amid lender resistance, the sale took until 1996 to steer through. GE Capital scampered away with the untold goodwill and long-standing customer list of an oligopoly supplier.The Australian government sold this goodwill for A$8 million.Today, in its guise as Genworth Australia, HLIC has a market cap of $1.5 billion.Leaving the credibility of financial regulators the principal victim of a forgotten episode in Australian banking.