The dramatic expansion in subprime mortgage credit fueled a remarkable boom and bust in the US housing market and created a global financial crisis. Even though considerable research examines the housing and mortgage markets during the previous decade, how the expansion in mortgage credit...

In this paper we examine the incentives for lenders to steer borrowers into piggyback loan structures to circumvent regulations requiring primary mortgage insurance (PMI) for loans with loan to value ratios (LTV) above 80%. Our empirical analysis focuses on propensity score matched portfolios of...

We develop a theoretical model demonstrating the potential spillover effects associated with the introduction of risky assets. Specifcally, we examine the potential increase in mortgage default risk on prime mortgages that results from the introduction of subprime mortgages in a local area. The...

This paper examines the relation between mortgage origination fees and mortgage broker competition. A reverse first-price sealed-bid auction model is used to motivate pricing behavior by brokers. Confirming the model predictions, our empirical analysis shows that increased mortgage brokerage...

Following concerns about undervaluation of minority-owned homes, we examine the incidence of racial appraisal bias using a nationwide sample of refinanced mortgages from 2000 to 2007. A unique feature of our data is that they allow us to observe the race of the both the homeowner and the...

This study examines the pricing of high-LTV debt to determine whether state-specific default laws have an impact on the availability and cost of that debt. We develop a simple theoretical model that provides predictions concerning borrower and lender choice of mortgage terms under differing...

Information revelation can occur in a variety of ways. For example, in the home mortgage market, borrowers reveal their expected house tenure through their choice of mortgage contracts. As a result, lenders offer a menu of mortgage interest rate and point combinations in an effort to learn...

This study examines the pricing of high-LTV debt to determine whether state-specific default laws have an impact on the availability and cost of that debt. We develop a simple theoretical model that provides predictions concerning borrower and lender choice of mortgage terms under differing...

This paper focuses on the potential externalities associated with subprime mortgage origination activity. Specifically, we examine whether negative spillover effects from subprime mortgage originations result in higher default rates in the surrounding area. Our empirical analysis controls for...