with search in the housing market and defaultable long-term mortgages. In equilibrium, both sellers' asking prices and time …-to-sell increase with the relative size of their outstanding mortgages. In turn, the liquidity of the housing market associated with … time-to-sell determines the mortgage standards of competitive lenders, measured by the maximum loan-to-value (LTV) ratio …

improving the home mortgage contract to make homeownership more achievable for creditworthy borrowers. Though the proposals in …, the mortgages it would fund, s are a characteristic of fixed-rate mortgages: Values can vary significantly from par if …, deviations from par make mortgage prepayment options valuable, so that lenders offering the product must manage option risk as …