Home equity conversion as presently constituted or proposed usually does not deal well with the potential problem of moral hazard. Once home-owners know that the risk of poor market performance of their homes is borne by investors, they have an incentive to neglect to take steps to maintain the...

Evidence is shown, using US foreclosure data by state 1975-93, that periods of high default rates on home mortgages strongly tend to follow real estate price declines or interruptions in real estate price increase. The relation between price decline and foreclosure rates is modelled using a...

The authors propose home equity insurance, insurance that protects homeowners against declines in the market value of their homes. Such insurance resembles both ordinary homeowners insurance and also financial hedging vehicles. One form of home equity insurance is pass-through futures and...