Does growing commercial-bank reliance on Federal Home Loan Bank (FHLBank) advances increase expected losses to the Bank Insurance Fund (BIF)? Our approach to this question begins by modeling the link between advances and expected losses. We then quantify the effect of advances on default...

We study how deposit competition affects a bank’s decision to securitize mortgages. Exploiting the state-specific removal of deposit market caps across the US as a source of competition, we find a 7.1 percentage point increase in the probability that banks securitize mortgage loans. This...

House prices have increased significantly in Canada over the past decade, driving household debt and residential construction activity to historical highs. Although macro-prudential tightening has slowed the pace of household borrowing in the last few years, house prices have continued to trend...

Rural homeownership is promoted in the United States by mortgage insurance programs administered by the federal government. We analyze the choice between assistance offered by two such agencies: the Federal Housing Administration and the Rural Housing Service. We find applicants are sensitive to...

The U.S. mortgage finance system was one of the focal points of the 2007-08 financial crisis, yet legislative decisions about the appropriate role of the federal government in the system remain unsettled. Policy deliberations have focused on Fannie Mae and Freddie Mac—the two enormous...

The financial health of the mortgage insurance industry is vital for the flow of mortgage credit to low wealth borrowers. Private mortgage insurance competes with insurance offered through the federal government, particularly the Federal Housing Administration. This paper employs a Heckman...

This paper examines the impacts of changes in the Federal Housing Administration (FHA) insured loan limit in response to the Economic Stimulus Act (ESA) of 2008. We use difference-in-difference approaches to compare the number of transactions and average loan-to-value ratios for properties...

Mortgage insurance compensates lenders for losses in the event of default by borrowers. Whether offered by private mortgage insurance companies or the Federal Housing Administration (FHA), mortgage insurance is often required for borrowers with insufficient wealth for a large downpayment in...

Recent reviews of the Federal Housing Administration's Mutual Mortgage Insurance (MMI) Fund find that the losses on its portfolio are projected to exceed the revenue from its existing insurance policies and its current capital resources. This article places the MMI Fund's “negative economic...

Much attention has been paid to the large decreases in value of non-agency residential mortgage-backed securities (RMBS) during the financial crisis. Many observers have argued that the fall in prices was partly driven by decreased liquidity and fire sales. We investigate whether capital...