Home Equity Insurance: A Pilot Project

33 Pages Posted: 28 May 2003  

William N. Goetzmann

Yale School of Management - International Center for Finance; National Bureau of Economic Research (NBER)

Andrew Caplin

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER)

Eric Hangen

Neighborhood Reinvestment Corporation

Barry J. Nalebuff

Yale University - Yale School of Management; Yale University - Cowles Foundation

Elisabeth Prentice

Neighborhood Reinvestment Corporation

John Rodkin

University of Chicago - Law School

Matthew I. Spiegel

Yale University - Yale School of Management, International Center for Finance

Tom Skinner

Real Liquidity

Date Written: May 2003

Abstract

Home equity is the single largest component of household wealth for the majority of American households. Yet, there is virtually no way for the average family to insure itself against drops in home value and the ensuing destructive financial loss. Much of U.S. housing policy has focused on helping them against the risk that home ownership entails.

In this paper, we document the development and implementation of a home equity insurance program launched in 2002 in Syracuse, New York. The range of issues arising from the practical implementation of a home equity insurance program, as well as the institutional challenges offer useful data for further extensions of the program.

Highlights of the outcome, to date, of the pilot program include the finding that implementation of the program was feasible on the local level, that customers understand and wanted to take part, and that clean data on housing transactions is a vital component of the future success and expansion of the project.

Suggested Citation

Goetzmann, William N. and Caplin, Andrew and Hangen, Eric and Nalebuff, Barry J. and Prentice, Elisabeth and Rodkin, John and Spiegel, Matthew I. and Skinner, Tom, Home Equity Insurance: A Pilot Project (May 2003). Yale ICF Working Paper No. 03-12. Available at SSRN: https://ssrn.com/abstract=410141

William N. Goetzmann (Contact Author)

Yale School of Management - International Center for Finance ( email )

165 Whitney Ave.
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-5950 (Phone)
203-436-9252 (Fax)

HOME PAGE: http://viking.som.yale.edu

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Andrew Caplin

New York University (NYU) - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-8950 (Phone)
212-995-3932 (Fax)

HOME PAGE: http://www.econ.nyu.edu/user/caplina/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Eric Hangen

Neighborhood Reinvestment Corporation ( email )

1325 G Street NW
Suite 800
Washington, DC 20005
United States

Barry Nalebuff

Yale University - Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-5968 (Phone)
203-432-6974 (Fax)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-5968 (Phone)

HOME PAGE: http://barrynalebuff.com

Elisabeth Prentice

Neighborhood Reinvestment Corporation ( email )

1325 G Street NW
Suite 800
Washington, DC 20005
United States

John Rodkin

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

Matthew I. Spiegel

Yale University - Yale School of Management, International Center for Finance ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6017 (Phone)
203-432-8931 (Fax)

HOME PAGE: http://som.yale.edu/~spiegel

Tom Skinner

Real Liquidity ( email )

1054 31st Street NW
Suite 410
Washington, DC 20007
United States
202-295-3048 (Phone)
202-338-6014 (Fax)

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