Message in a Mortgage: What Dodd-Frank's 'Qualified Mortgage' Tells Us About Ourselves

Abstract

This essay outlines the ethics that shape federal housing finance policy and situates them in the context of the Dodd-Frank Act. In a way, however, it asks a simpler question: what do our mortgages tell us about our society? The essay proceeds as follows. First, it outlines three ethics that inform American housing finance policy generally. Second, it contrasts two mortgages: the one from the subprime boom of the early 2000s and the other from Dodd-Frank, the “Qualified Mortgage.” It concludes by using the three ethics to answer the question posed above and outlining what is at stake in the housing sector given the choices that we might make.

Keywords: subprime, predatory lending, systemic risk, consumer protection, financial regulation, financial crisis, Dodd-Frank, Qualified Mortgage, Qualified Residential Mortgage