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Mortgage Market Note 10-2: The Housing Goals of Fannie Mae and Freddie Mac
One of the purposes of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (the Safety and Soundness Act) was to address concerns about the affordable housing activities of Fannie Mae and Freddie Mac (the Enterprises). The Enterprises had historically lagged other sectors of...
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Mortgage Market Note 10-1: U.S. Treasury Support for Fannie Mae and Freddie Mac
The Housing and Economic Recovery Act of 2008 (HERA) authorized the Secretary of the Treasury to support Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) by purchasing obligations and other securities from those government-sponsored enterprises (collectively, the housing GSEs). HERA...
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Housing and Mortgage Markets and the Housing Government-Sponsored Enterprises in 2008
Author: Andrew Leventis, Principal Economist Forrest Pafenberg, Senior Policy Analyst Valerie L. Smith, Senior Policy Analyst This Federal Housing Finance Agency (FHFA) research paper reviews developments in the housing sector and mortgage markets and the activities of Fannie Mae, Freddie Mac...
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Securitization and Mortgage Default
Reputation vs. Adverse Selection Author: Ronel Elul, Federal Reserve Bank of Philadelphia The academic literature, the popular press, and policymakers have all debated the securitization’s contribution to the poor performance of mortgages originated in the run-up to the current crisis. Theoretical...
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Liar’s Loan?
Effects of Origination Channel and Information Falsification on Mortgage Delinquency Author: Wei Jiang, Columbia Business School Ashlyn Aiko Nelson, Indiana University Edward Vytlacil, Yale University This paper presents a comprehensive predictive model of mortgage delinquency using a unique...
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Taking the Lie Out of Liar Loans
Author: Michael LaCour-Little, California State University Jing Yang, California State University Abstract: We examine stated income loans originated by Bear Stearns affiliates during the recent housing market run-up and market collapse. After showing the extent to which these loans have higher...
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Mortgage Market Note 09-4: State of the Private Mortgage Insurance Industry
Like other debt instruments, residential mortgages involve credit risk. That risk arises from uncertainty over whether the borrower will perform as required by the mortgage document. Mortgage insurance provides protection against the losses created by mortgage defaults. Most mortgage insurance...
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Mortgage Market Note 09-3: Federal Home Loan Bank Capital
The 12 Federal Home Loan Banks (FHLBanks) are privately capitalized, government-sponsored enterprises. Unlike Fannie Mae and Freddie Mac, which are publicly traded and owned, each FHLBank is a cooperative. In keeping with that cooperative business model, all capital stock in an FHLBank is owned by...
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Updated Assumptions Used to Estimate Single-Family Mortgages Originated and Outstanding, 1990 – 2009 Q1
Author: Forrest Pafenberg, Senior Policy Analyst Except where noted, all assumptions used to generate estimates of single-family mortgages originated and outstanding are as described in the paper, Single-Family Mortgages Originated and Outstanding: 1990 – 2004.
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The Contagion Effect of Foreclosed Properties
Author: John P. Harding, Professor of Finance and Real Estate Eric Rosenblatt, Fannie Mae Vincent W. Yao, Fannie Mae Although previous research shows that prices of homes in neighborhoods with foreclosures are lower than those in neighborhoods without foreclosures, it remains unclear whether the...