Decomposing Underwriting Spreads for GSEs and Frequent Issuer Financial Firms

41 Pages Posted: 28 Aug 2012

See all articles by David Harrison

David Harrison

Texas Tech University

Andrea J. Heuson

University of Miami - Department of Finance

Michael Seiler

College of William and Mary - Finance

Date Written: August 26, 2012

Abstract

This paper investigates the determinants of underwriting fees charged to active GSE and financial industry borrowers on debt issuances, how such fees change over time, and how they vary with the characteristics of the debt, underwriting mechanism, and issuer. We pay particular attention to how risk factors generated by the actions of individual mortgage borrowers, and the financing strategies put in place by the GSEs, impact underwriting spreads. We find spreads paid by both GSEs and privately held financial firms were significantly influenced by risk-related developments in the market for housing finance well before the advent of the housing crisis.

Keywords: GSE, underwriting spreads, debt issuance, housing crisis

Suggested Citation

Harrison, David and Heuson, Andrea J. and Seiler, Michael, Decomposing Underwriting Spreads for GSEs and Frequent Issuer Financial Firms (August 26, 2012). Journal of Real Estate Portfolio Management, 2012. Available at SSRN: https://ssrn.com/abstract=2136625

David Harrison

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Andrea J. Heuson

University of Miami - Department of Finance ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States
305-284-4362 (Phone)
305-284-4800 (Fax)

Michael Seiler (Contact Author)

College of William and Mary - Finance ( email )

VA
United States

HOME PAGE: http://mason.wm.edu/faculty/directory/seiler_m.php

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