model with collateral constraints. We discuss the implications of our findings for FHA mortgage program, the shift from … are as collateral for mortgages. Older and less standardized houses tend to have higher price dispersion, and their … higher default risk, consistent with the collateral channel. We quantify the effect on homeownership gap using a lifecycle …

We generate a model of mortgage lending where a lender lends in two markets: one for conforming mortgages and one for … alternative mortgages. The model assumes that alternative mortgage products are optimal for borrowers with higher income … variability. When the collateral value of alternative mortgages increases, it decreases lenders’ cost of capital, leading lenders …