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Andrew Caplin
Leonard N. Stern School of Business - Department of Economics William N. Goetzmann
Yale School of Management - International Center for Finance Eric Hangen
Neighborhood Reinvestment Corporation Barry J. Nalebuff
Yale School of Management Elisabeth Prentice
Neighborhood Reinvestment Corporation John Rodkin
University of Chicago - Law School Matthew I. Spiegel
Yale School of Management, International Center for Finance Tom Skinner
Real Liquidity
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28 May 03
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Last Revised:
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23 Jan 06
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1,715
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Abstract:
Home equity is the single largest component of household wealth for the majority of American households. Yet, there is virtually no way for the average family to insure itself against drops in home value and the ensuing destructive financial loss. Much of U.S. housing policy has focused on helping them against the risk that home ownership entails.
In this paper, we document the development and implementation of a home equity insurance program launched in 2002 in Syracuse, New York. The range of issues arising from the practical implementation of a home equity insurance program, as well as the institutional challenges offer useful data for further extensions of the program.
Highlights of the outcome, to date, of the pilot program include the finding that implementation of the program was feasible on the local level, that customers understand and wanted to take part, and that clean data on housing transactions is a vital component of the future success and expansion of the project.
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