Search Results

Showing results 1 to 7 of approximately 7.

(refine search)
SORT BY: PREVIOUS / NEXT
Keywords:Mortgages and credit 

Working Paper
Liquidity Crises in the Mortgage Market

Non-banks originated about half of all mortgages in 2016, and 75% of mortgages insured by the FHA or VA. Both shares are much higher than those observed at any point in the 2000s. We describe in this paper how non-bank mortgage companies are vulnerable to liquidity pressures in both their loan origination and servicing activities, and we document that this sector in aggregate appears to have minimal resources to bring to bear in a stress scenario. We show how the same liquidity issues unfolded during the financial crisis, leading to the failure of many non-bank companies, requests for ...
Finance and Economics Discussion Series , Paper 2018-016

Working Paper
Household Financial Decision-Making After Natural Disasters: Evidence from Hurricane Harvey

Hurricane Harvey brought more than four feet of rainfall to the Houston area in August 2017, leading to substantial flooding in many areas. Using regulatory data with detailed information on borrowing terms, we compare the borrowing response to Hurricane Harvey in parts of Houston that were more and less affected by flooding. We find that hurricane-affected households borrowed in a price-sensitive and time-limited manner, relying almost exclusively on promotional-rate credit cards and mortgage forbearance for new credit and repaying balances quickly. We find that conditional on flooding, ...
Finance and Economics Discussion Series , Paper 2022-015

Working Paper
Improving the 30-Year Fixed-Rate Mortgage

The 30-year fixed-rate fully amortizing mortgage (or "traditional fixed-rate mortgage") was a substantial innovation when first developed during the Great Depression. However, it has three major flaws. First, because homeowner equity accumulates slowly during the first decade, homeowners are essentially renting their homes from lenders. With so little equity accumulation, many lenders require large down payments. Second, in each monthly mortgage payment, homeowners substantially compensate capital markets investors for the ability to prepay. The homeowner might have better uses for this ...
Finance and Economics Discussion Series , Paper 2017-090

Working Paper
Crowding Out Effects of Refinancing on New Purchase Mortgages

We present evidence that binding mortgage processing capacity constraints reduce mortgage originations to borrowers of low to modest credit quality. Mortgage processing capacity constraints typically bind when the demand for mortgage refinancing shifts outward, usually because of lower mortgage rates. As a result, high capacity utilization leads mortgage lenders to ration mortgage credit, completing mortgages that require less underwriting resources, and are thus less costly, to produce. This is hypothesized to have a particularly adverse impact on the ability of low- to modest-credit-quality ...
Finance and Economics Discussion Series , Paper 2015-17

Working Paper
The Effects of Mortgage Credit Availability : Evidence from Minimum Credit Score Lending Rules

Since the housing bust and financial crisis, mortgage lenders have introduced progressively higher minimum thresholds for acceptable credit scores. Using loan-level data, we document the introduction of these thresholds, as well as their effects on the distribution of newly originated mortgages. We then use the timing and nonlinearity of these supply-side changes to credibly identify their short- and medium-run effects on various individual outcomes. Using a large panel of consumer credit data, we show that the credit score thresholds have very large negative effects on borrowing in the short ...
Finance and Economics Discussion Series , Paper 2016-098

Working Paper
How House Price Dynamics and Credit Constraints affect the Equity Extraction of Senior Homeowners

Households can borrow against equity through different channels, including home equity lines of credit (HELOCs), second liens, cash-out refinancing, and--for senior homeowners--reverse mortgages. We use data from the New York Federal Reserve/Equifax Consumer Credit Panel, the U.S. Department of Housing and Urban Development, and other sources to jointly estimate the decision to extract equity through these different channels. Specifically, we identify the influence of credit constraints, house price dynamics and their interactions on the proportion of seniors in a ZIP code extracting through ...
Finance and Economics Discussion Series , Paper 2015-70

Working Paper
The Effect of Interest Rates on Home Buying : Evidence from a Discontinuity in Mortgage Insurance Premiums

We study the effect of interest rates on the housing market by taking advantage of a sudden and unexpected price change in a large government mortgage program. The Federal Housing Administration (FHA) insures most mortgages to lower-downpayment, lower credit score borrowers, including a majority of first-time homebuyers. The FHA charges borrowers an annual mortgage insurance premium (MIP), and in January, 2015 the FHA abruptly reduced the MIP, and thus FHA borrowers? effective interest rate, by 50 basis points. Using a regression discontinuity design, we find that the MIP reduction increased ...
Finance and Economics Discussion Series , Paper 2017-086

FILTER BY year

FILTER BY Content Type

FILTER BY Jel Classification

G21 4 items

D12 2 items

D14 2 items

G28 2 items

D18 1 items

E52 1 items

show more (13)

PREVIOUS / NEXT