Too Much Skin-in-the-Game? The Effect of Mortgage Market Concentration on Credit and House Prices

2021 ◽  
Author(s):  
Deeksha Gupta
Keyword(s):  
High Risk ◽  
House Prices ◽  
Housing Markets ◽  
Market Concentration ◽  
Mortgage Market ◽  
The Government ◽  
Government Sponsored Enterprises

Abstract In 2007, as American housing markets started to decline, the government-sponsored enterprises dramatically increased their acquisitions of low FICO and high loan-to-value mortgages. By 2008, the agencies had reversed course by decreasing their high-risk acquisitions. I develop a theory in which large lenders temporarily increase high-risk activity at the end of a boom. In the model, lenders with many outstanding mortgages have incentives to extend risky credit to prop up house prices. The increase in house prices lessens the losses they make on their outstanding portfolio of mortgages. As the bust continues, lenders slowly wind down their mortgage exposure.

scholarly journals Innovation and the theory of fields

AMS Review ◽  
2021 ◽  
Author(s):  
Neil Fligstein
Keyword(s):  
Field Theory ◽  
Mortgage Market ◽  
Economic Theories ◽  
Mortgage Securitization ◽  
Savings And Loan ◽  
Private Banks ◽  
The Government ◽  
Theory Of Fields ◽  
Government Sponsored Enterprises ◽  
The U.S

AbstractInnovation does not just involve the creation of new products, but also includes the need for new kinds of processes and organizations. Field theory can help us understand why some innovations are more piecemeal and others more revolutionary. It explicitly links innovation to the process of the emergence, adjustment, and transformation of markets (conceived of as fields). To illustrate this perspective, the case of the transition in the U.S. from a mortgage market dominated by savings and loan banks to the emergence of mortgage securitization dominated by the government sponsored enterprises and the largest private banks, is explicated. Field theory helps us understand the logic of this transition and the myriad players and innovations that helped produce a large part of what we consider to be modern finance. The case also shows the limits of economic theories of financial innovation and the sociology of finance. I end with a discussion of how field theory can inform subsequent research on innovation.

Housing Finance Reform: Private Markets Versus Government Guarantees

2011 ◽  
Vol 01 (04) ◽  
pp. 823-836
Author(s):  
Dwight M. Jaffee
Keyword(s):  
Risk Sharing ◽  
Mortgage Market ◽  
Housing Finance ◽  
Finance Reform ◽  
Fannie Mae ◽  
The Government ◽  
Home Mortgage ◽  
Government Sponsored Enterprises ◽  
Private Markets

This paper evaluates the major alternative proposals for reforming the U.S. home mortgage market assuming that the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mae, will be closed. The paper compares proposals that advocate primary reliance on private markets to take on the GSE functions with proposals that advocate government mortgage guarantees, including a discussion of how these plans differ in terms of duration, scope, and risk-sharing. The paper concludes with a discussion of current government attempts to expedite the modification or refinancing of existing mortgages, including a plan for the transition from the current situation to the long-term reforms.

Dampak Insentif Pajak Perumahan Terhadap Potensi Penerimaan Pajak Negara Dan Peningkatan Pendapatan Masyarakat : Kasus Provinsi Papua

2016 ◽  
Vol 1 (1) ◽  
pp. 13-22
Author(s):  
Towaf Totok Irawan
Keyword(s):  
Low Income ◽  
House Prices ◽  
Tax Incentives ◽  
High Price ◽  
Short Term ◽  
Primary Input ◽  
State Revenue ◽  
Long Run ◽  
The Government ◽  
The Impact

Until now the government and private sector have not been able to address the backlog of 13.5 million housing units for ownership status and 7.6 million units for residential status. The high price of land has led to the high price of the house so that low-income communities (MBR) is not able to reach out to make a home purchase. In addition to the high price of land, tax factors also contribute to the high price of the house. The government plans to issue a policy for the provision of tax incentives, ie abolish VAT on home-forming material transaction. This policy is expected to house prices become cheaper, so the demand for housing increases, and encourage the relevant sectors to intensify its role in the construction of houses. It is expected to replace the lost tax potential and increase incomes. Analysis of the impact of tax incentives housing to potential state revenue and an increase in people's income, especially in Papua province is using the table IO because in addition to looking at the role each sector can also see the impact on taxes (income tax 21 Pph 25 Pph, VAT), and incomes (wage). Although in the short-term impact is still small, but very rewarding in the long run. Keywords: Backlog, Gross Input, Primary Input, Intermediate Input

scholarly journals Housing wealth, mortgages and Australians’ labour force participation in later life

Urban Studies ◽  
2021 ◽  
pp. 004209802110265
Author(s):  
Rachel Ong ◽  
Gavin A Wood ◽  
Melek Cigdem
Keyword(s):  
Household Income ◽  
House Prices ◽  
Labour Force ◽  
Housing Markets ◽  
Later Life ◽  
Labour Force Participation ◽  
Urban Housing ◽  
Housing Wealth ◽  
Working Lives ◽  
Imputed Rent

In the life cycle model of consumption and saving, homeownership is an important vehicle for horizontal redistribution. Households accumulate wealth in owner-occupied housing during working lives before benefiting from imputed rent streams in retirement. But in some countries housing wealth’s welfare role has broadened as owners increasingly use flexible mortgages to smooth consumption during working lives. One consequence is higher outstanding mortgages later in life, a burden exacerbated by high real house prices that compel home buyers to demand mortgages that are a growing multiple of their incomes. We investigate whether these developments are prompting longer working lives, an idea that is especially relevant in countries offering relatively low government pensions. Australia is one such country. We use the 2001–2017 panels of the Household, Income and Labour Dynamics in Australia Survey to estimate hazard models of exits from the Australian labour force as workers approach pensionable age. We find that those with high outstanding mortgage debts are more likely to postpone retirement, as are those with relatively low amounts of private pension wealth. These results are stronger in urban housing markets, and especially among males.

Organizations' Relative Degree of Exposure to Selection Discrimination Litigation

2002 ◽  
Vol 31 (3) ◽  
pp. 277-292 ◽  
Author(s):  
David E. Terpstra ◽  
R. Bryan Kethley
Keyword(s):  
High Risk ◽  
Federal Court ◽  
Court Cases ◽  
Industry Type ◽  
Government Sector ◽  
Risk Of Exposure ◽  
Primary Selection ◽  
The Government ◽  
High Degree ◽  
Industry Sectors

This study examined nearly 400 federal court cases in which substantive, or primary, selection devices were legally challenged as being discriminatory. The findings indicated that the relative frequency of occurrence of discrimination charges varied for different types of organizations. Some industry sectors and some job types were associated with a much greater risk of exposure to litigation than others. For example, the government sector appeared to have a relatively high degree of exposure to selection discrimination litigation. The findings also indicated that the outcomes of the federal court cases (whether the ruling was for the defendant/employer or for the plaintiff) varied by industry type, job type, and type of discrimination charge. Specific recommendations are offered to organizations that operate in high risk industry sectors, and that have high risk job types, with an eye toward reducing the possibility of litigation.

Burundi's security outlook will remain fragile

2021 ◽  
Keyword(s):  
High Risk ◽  
Content Type ◽  
Infrastructure Investments ◽  
The Government

Significance The government denounced the attacks as acts of terrorism and claimed to have killed one assailant and arrested five others. However, no information has been released on the alleged perpetrators and no group has claimed responsibility. Impacts Although growth is recovering slightly, the government is unlikely to meet its (already modest) 2021/22 budgetary targets. To boost the economy, the president desperately needs the kind of stimulus that infrastructure investments can provide. Though official case numbers are low, a slow vaccine rollout means Burundi will remain at high risk of further COVID-19-related disruptions.

scholarly journals SUBPRIME MORTGAGE CRISIS IN THE UNITED STATES IN 2007–2008: CAUSES AND CONSEQUENCES (PART I)

Ekonomika ◽  
2015 ◽  
Vol 93 (4) ◽  
pp. 85-118 ◽  
Author(s):  
Vaidotas Pajarskas ◽  
Aldona Jočienė
Keyword(s):  
United States ◽  
Federal Reserve ◽  
The United States ◽  
Mortgage Market ◽  
Subprime Mortgage ◽  
Market Expansion ◽  
Mortgage Crisis ◽  
Subprime Mortgage Crisis ◽  
The Government ◽  
The Impact

The main purpose of this article is to determine which factors and how contributed to the subprime mortgage crisis in the United States in 2007–2008, what their causal links and effects on the markets and the whole economy were, and to assess what actions could have been taken by the Federal Reserve and the Government in order to mitigate or prevent the consequences of subprime mortgage crisis and housing bubble. In order to obtain the research results, the authors performed a qualitative analysis of the scientific literature on the course of events and their development that led to the subprime mortgage crisis, and focused on the insufficiently regulated home mortgage market expansion, the impact on the subprime mortgage crisis of financial innovations and financial engineering, poorly evaluated systemic risks and policy undertaken by both the U.S. Government and the Federal Reserve before and after the crisis. The quantitative research focused on two main parts: firstly, analysis of the dependence between the causes of subprime mortgage crisis and the consequences, using a statistical and regression analysis, and secondly, an alternative path the Government and the Federal Reserve could have taken in their policy actions and the results they could have produced. The authors believe that the results of the research could give useful guidelines to the central bankers and government officials on how to make long-term decisions that can help in preparing for the financial distress, mitigating the consequences when the crisis strikes, accelerating the recovery and even preventing the crisis it in the future. The second part of the qualitative research will appear in the next issue of the journal.

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