This paper addresses the expansion and performance of non-standard mortgage lending products to better understand the impact of such products on borrowers and the financial system. We show that ex ante measured credit risk of these instruments increased and this risk was mispriced. We also...

In this paper we identify the relationship of the pricing of residential mortgage lending products to their market share during the run up to the financial crisis of 2007. We then use this relationship to decompose the total impact of nontraditional mortgage products on house price declines...