Abstract

http://ssrn.com/abstract=1701661
 


 



Implications of the Housing Market Bubble for Sustainable Homeownership


Paul Calem


Board of Governors of the Federal Reserve System (FRB)

Leonard I. Nakamura


Federal Reserve Bank of Philadelphia

Susan M. Wachter


University of Pennsylvania - Wharton School, Department of Real Estate

November 2, 2010

THE AMERICAN MORTGAGE SYSTEM: RETHINK AND REFORM, Susan Wachter and Marty Smith, eds., University of Pennsylvania Press, Forthcoming
U of Penn, Inst for Law & Econ Research Paper No. 10-27

Abstract:     
This paper presents evidence on the impact of the housing bubble, flood of high risk mortgage lending, and subsequent meltdown in homeownership. We point to agency and information problems in the mortgage origination and securitization market; incomplete risk transfer; and underassessment of systemic risk. These factors and their relationship to exaggerated house price dynamics and excessive volatility undermine the objective of sustainable homeownership. This requires attention from policymakers, including a need for improved financial and regulatory data.

Number of Pages in PDF File: 33

Keywords: Mortgage, High Risk Mortgage, High Risk Lending, Securitization, Risk Transfer, Housing Bubble

JEL Classification: G21, G24, K20

Accepted Paper Series





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Date posted: November 3, 2010  

Suggested Citation

Calem, Paul and Nakamura, Leonard I. and Wachter, Susan M., Implications of the Housing Market Bubble for Sustainable Homeownership (November 2, 2010). THE AMERICAN MORTGAGE SYSTEM: RETHINK AND REFORM, Susan Wachter and Marty Smith, eds., University of Pennsylvania Press, Forthcoming; U of Penn, Inst for Law & Econ Research Paper No. 10-27. Available at SSRN: http://ssrn.com/abstract=1701661

Contact Information

Paul Calem
Board of Governors of the Federal Reserve System (FRB) ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
Leonard I. Nakamura
Federal Reserve Bank of Philadelphia ( email )
Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-3804 (Phone)
215-574-4364 (Fax)
Susan M. Wachter (Contact Author)
University of Pennsylvania - Wharton School, Department of Real Estate ( email )
The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

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