We show how the timing of financial innovation might have contributed to the mortgage bubble and then to the crash of … 2007-2009. We show why tranching and leverage first raised asset prices and why CDS lowered them afterwards. This may seem … puzzling, since it implies that creating a derivative tranche in the securitization whose payoffs are identical to the CDS will …

-2009. We study the effect of leverage, tranching, securitization and CDS on asset prices in a general equilibrium model with … collateral. We show why tranching and leverage tend to raise asset prices and why CDS tend to lower them. This may seem puzzling …We show how the timing of financial innovation might have contributed to the mortgage boom and then to the bust of 2007 …

We review the theory of leverage developed in collateral equilibrium models with incomplete markets. We explain how … leverage tends to boost asset prices, and create bubbles. We show how leverage can be endogenously determined in equilibrium …, and how it depends on volatility. We describe the dynamic feedback properties of leverage, volatility, and asset prices …

In March 2020, massive customer selling of U.S. Treasury securities and agency mortgage-backed securities (MBS …

Did securitization exacerbate the foreclosure crisis by altering mortgage servicing practices? I exploit the … unanticipated freeze of private mortgage securitization in 2007 to provide new evidence that securitization increases foreclosure … favoring foreclosure. The evidence implies that securitization significantly increased foreclosure rates during and after the …

a principal reduction loan modification before he is foreclosed on. He is well versed in the failures of current loan …

This study investigates homeownership decisions of young adult children who experienced parental foreclosure. The … results show that they were less likely to become homeowners when parental foreclosure happened. The foreclosures between 2009 …. The parental foreclosure effects did not seem to operate through neighborhood effects or common economic shocks, but the …

individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …

individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …

individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …