While other countries dismantled their segmented housing finance systems and linked housing finance to capital markets through deregulated depositories, the US linked housing finance to capital markets through depository deregulation and securitization. Elsewhere securitization has not...

From a broad macro-financial structure perspective, credit conditions have gaven rise to house price booms and busts in several advanced economies (e.g., Ireland, Spain, and the U.S.), and, more specifically in the U.S., an underpricing of risk made possible by regulatory arbitrage and shadow...

Mortgage-backed securities (MBS) funded the U.S. housing bubble, while the ensuing bust resulted in systemic risk and the global financial crisis of 2007-09. In the run-up to the crisis, MBS pricing failed to reveal the growing credit risk. This article draws lessons from this failure that could...

Testimony prepared for “Sustainable Housing Finance: Private Sector Perspectives on Housing Finance Reform - Part IV” on December 6, 2017, before subcommittee on housing and insurance U.S. House of Representatives

We derive the optimal credit default swap premium a financial institution requires to assume the default risk of fixed income instruments. This premium is a function of the institution's capital and current exposure. In most cases, an institution requires an increasing premium to assume...

Existing data sources show divergent estimates of the number of homes purchased by first-time homebuyers as a share of all home purchases. In this paper, we use a new data set to construct a time series of the share of first-time homebuyers. This series, based on the Federal Reserve Bank of New...

Despite national economic and real estate market trends that are not unique in U.S. history, the housing market woes of the United States appear to be developing into an historic, adverse episode. Indeed other countries have experienced the same fundamental forces and find themselves with...

Shelter is a necessity of life and the building block of cities. Cities cannot be inclusive without affordable housing near transportation, jobs, and necessary public services like safety, health care, and education. Housing is the most important asset for the majority of households and anchors...

As recent hurricane seasons have made clear, flooding can cause a great deal of property damage and human suffering. Indeed, flooding causes the most damage of any natural disaster in the United States and worldwide and affects the greatest number of people. Yet today most households are...

This paper analyzes the impact of the 1968 Congressional Federal Housing Administration (FHA) amendments on urban areas. The legislation's major impact on population, employment, and the fiscal condition in urban areas is likely to occur through changed neighborhood property values. Some...