|
|
|
|
||||
|
||||
Did Local Lenders Forecast the Bust? Evidence from the Real Estate MarketKristle Romero CortésFederal Reserve Banks - Federal Reserve Bank of Cleveland; Boston College November 8, 2012 25th Australasian Finance and Banking Conference 2012 Abstract: This paper shows that mortgage lenders with a physical branch near the property being financed have better information about home-price fundamentals than non-local lenders. During the real estate run-up from 2002-06, home price growth negatively correlates with the share of loans made by local lenders, namely lenders with a branch in the respective county. Moreover, home prices fell less from 2006-09 in areas where more of the loans were made by local lenders. California foreclosure rates during the crisis are negatively correlated with local lending during the run-up. A1 standard deviation increase in local loans is associated with 5 fewer foreclosures for every one thousand houses. When local lenders retain loans for their portfolio rather than securitizing, the results for both home price growth and foreclosures are even stronger.
Number of Pages in PDF File: 46 Keywords: Local Share, House price growth JEL Classification: G21 working papers seriesDate posted: December 2, 2011 ; Last revised: November 8, 2012Suggested CitationContact Information
|
|
||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 0.406 seconds
