Unmasking the Mortgage Interest Deduction
The deduction of mortgage interest from federal income taxes subsidizes homeownership, making it more affordable to become a homeowner. Or so we’ve been told. It is a highly popular tax [...]
Anatomy of the Beginning of the Housing Boom: U.S. Neighborhoods and Metropolitan Areas, 1993-2009
We provide novel estimates of the timing, magnitudes, and potential determinants of the start of the last housing boom across American neighborhoods and metropolitan areas (MSAs) using a rich new [...]
Complex Mortgages
We investigate the characteristics and the default behavior of households who take out complex mortgages. Unlike traditional fixed rate or adjustable rate mortgages, complex mortgages are not fully amortizing and [...]
Real Estate Investors, the Leverage Cycle, and the Housing Market Crisis
We explore a mostly undocumented but important dimension of the housing market crisis: the role played by real estate investors. Using unique credit-report data, we document large increases in the [...]
Did Bankruptcy Reform Cause Mortgage Default to Rise?
This paper argues that the U.S. bankruptcy reform of 2005 played an important role in the mortgage crisis and the current recession. When debtors file for bankruptcy, credit card debt [...]
International Capital Flows and House Prices: Theory and Evidence
The last fifteen years have been marked by a dramatic boom-bust cycle in real estate prices, accompanied by economically large fluctuations in international capital flows. We argue that changes in [...]
Fixing Mortgage Finance: What to Do with the Federal Housing Administration?
While Fannie Mae, Freddie Mac, and private subprime lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market [...]
Restoring Trust in Mortgage-Backed Securities
The mortgage finance market has leaned heavily on government support over the past few years. More than 90 percent of mortgages originated in 2011 were securitized by government entities using [...]
A New Look at Second Liens
We use data from credit report and deeds records to better understand the extent to which second liens contributed to the housing crisis by allowing buyers to purchase homes with [...]
Did the Community Reinvestment Act (CRA) Lead to Risky Lending?
Yes, it did. We use exogenous variation in banks' incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect [...]