Making Sense of the Subprime Crisis
Should market participants have anticipated the large increase in home foreclosures in 2007 and 2008? Most of these foreclosures stemmed from mortgage loans originated in 2005 and 2006, raising suspicions [...]
What Have They Been Thinking? Homebuyer Behavior in Hot and Cold Markets
Questionnaire surveys undertaken in 1988 and annually from 2003 through 2012 of recent homebuyers in each of four U.S. metropolitan areas shed light on their expectations and reasons for buying [...]
Efficient Credit Policies in a Housing Debt Crisis
Consumption, income, and home prices fell simultaneously during the financial crisis, compounding recessionary conditions with liquidity constraints and mortgage distress. We develop a framework to guide government policy in response [...]
The Financial Crisis: An Inside View
This paper reviews the policy response to the 2007–09 financial crisis from the perspective of a senior Treasury official at the time. Government agencies faced severe constraints in addressing the [...]
Is a Household Debt Overhang Holding Back Consumption?
The recent plunge in U.S. home prices left many households that had borrowed voraciously during the credit boom highly leveraged, with very high levels of debt relative to the value [...]
Credit Policy as Fiscal Policy
The $1.6 trillion that U.S. households borrowed in 2010 through government-backed direct loan and loan guarantee programs—most notably from Fannie Mae and Freddie Mac, the student loan programs, and the [...]
Bubble, Bubble, Where’s the Housing Bubble?
Evidence of a housing bubble has been suggestive but indirect, in that it does not address the key question of whether housing prices are justified by the value of the [...]
Why Did Young Families Lose So Much Wealth During the Crisis? The Role of Homeownership
The authors use the Federal Reserve’s Survey of Consumer Finances to document a boom in home ownership and mortgage borrowing among young families in the years leading up to the [...]
Just Released: New York Fed Press Briefing Highlights Changes in Home Equity and How It’s Used
The Quarterly Report for the first quarter of 2018 shows a continued increase in debt balances, which rose $63 billion during the quarter, driven by increased mortgage balances (+$57 billion). [...]
Mortgage-Backed Securities and the Financial Crisis of 2008: a Post Mortem
We examine the payoff performance, up to the end of 2013, of non-agency residential mortgage-backed securities (RMBS), issued up to 2008. We have created a new and detailed data set [...]