Secondary Markets, Risk, and Access to Credit Evidence from the Mortgage Market

44 Pages Posted: 6 Feb 2008

See all articles by Stuart S. Rosenthal

Stuart S. Rosenthal

Syracuse University - Department of Economics

Stuart A. Gabriel

University of California, Los Angeles - Anderson School of Management

Date Written: April 17, 2007

Abstract

Secondary markets for credit are widely believed to improve efficiency and increase access to credit. In part, this is because of their greater ability to manage risk. However, the degree to which secondary markets expand access to credit is virtually unknown. Using the mortgage market as an example, we begin to fill that gap. Our conceptual model suggests that secondary credit markets have potentially ambiguous effects on interest rates, but unambiguous positive effects on the number of loans issued. We focus our empirical analysis on the latter using 1992-2004 HMDA files for conventional, conforming, home purchase loans in conjunction with Census tract data.

Suggested Citation

Rosenthal, Stuart S. and Gabriel, Stuart A., Secondary Markets, Risk, and Access to Credit Evidence from the Mortgage Market (April 17, 2007). Available at SSRN: https://ssrn.com/abstract=1087114 or http://dx.doi.org/10.2139/ssrn.1087114

Stuart S. Rosenthal

Syracuse University - Department of Economics ( email )

426 Eggers Hall
Syracuse, NY 13244-1020
United States
315-443-3809 (Phone)

Stuart A. Gabriel (Contact Author)

University of California, Los Angeles - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
310-825-2922 (Phone)
310-206-5455 (Fax)

HOME PAGE: http://www.anderson.ucla.edu

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