THE AMERICAN MORTGAGE SYSTEM: RETHINK AND REFORM, Susan Wachter and Marty Smith, eds., University of Pennsylvania Press, Forthcoming
33 Pages Posted: 3 Nov 2010
Date Written: November 2, 2010
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.
Keywords: Mortgage, High Risk Mortgage, High Risk Lending, Securitization, Risk Transfer, Housing Bubble
JEL Classification: G21, G24, K20
Suggested Citation: 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: https://ssrn.com/abstract=1701661