Mortgage Debt & Home Equity

Mortgage Market 2011 - Not a Pretty Picture

09/19/12

The annual Federal Reserve report on Home Mortgage Disclosure Act (HMDA) data for 2011 paints a bleak picture.  Despite interest rates at or below 4%,
mortgage lending volume continued its four-year decline.  The drop in mortgage lending was
particularly steep for minority home buyers, and in distressed neighborhoods.  More than 40% of home purchase loans that were made were backed by government (FHA or VA) insurance. 
Overall mortgage denial rates were 31% for black ap

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Why Housing?

08/31/12

Susan Wachter and I have a new paper out, entitled Why Housing?  The paper is a critical review of scholarly theories of the housing bubble.  It focuses on the question of what made housing vulnerable to a bubble and why it has been so hard to resuscitate the market.  

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Why No Prosecutions

08/26/12

The NYTimes had a very good editorial today bemoaning, with resignation, that there will not be any serious prosecutions of senior bank executives or institutions for the financial crisis.  The biggest fish to be caught was Lee Farkas. Who? That's the point.

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Cramdown and the Cost of Mortgage Credit

08/25/12

Joshua Goodman at the Harvard Kennedy School and I have a new paper out examining the impact of Chapter 13 cramdown on the cost and availability of mortgage credit.  Historically, when cramdown was permitted in some judicial districts prior to 1993 it was associated with a statistically significant, if small, increase in the cost of credit.

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Do Your Research, Ezra Klein!

08/21/12

Ezra Klein has joined the melee over the Obama Administration's housing policy failure with an apologia for the Administration.  Klein argues: 

The right question on housing, then, is not whether the administration’s policies proved insufficient. They did. It’s what would have been better. And that’s not a question that either Appelbaum or Goldfarb conclusively answer. It’s not even a question that the most credible critics of the Obama administration’s housing policies conclusively answer.

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Some Advice from the IMF: Cramdown Mortgages in Bankruptcy

07/04/12

The International Monetary Fund has focused its critical gaze on us. Just in time for the holiday marking the end of our colonial period, the IMF has completed its "Mission to the United States of America."  See here.  The IMF has held up its neocolonial mirror and found us problematic: "The U.S. recovery remains tepid."  Anyone disagree? Annoying to have outsiders tell us the truth.

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The New Cramdown

06/29/12

For the past couple of years, I've been thinking that cramdown is dead as a policy solution. But I was thinking about cramdown as requiring legislation. It doesn't. We could start doing it tomorrow. Under current bankruptcy law, a Chapter 13 plan may be confirmed only if secured creditors receive their collateral, receive the value of their collateral, or consent to the plan.

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Fighting Foreclosure Fatigue

06/27/12

Folks in Washington tell me there is a general sense of “foreclosure fatigue” in our nation’s capital. It’s just so boring to keep thinking about all the people losing their homes year after year. Can’t we move on to something new? This attitude goes along with a failure to do anything meaningful to get out of the five-year-old mortgage crisis, still very much with us. More charitably, the people who would like to do something see no political opening in an election year.

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FHFA Wants Money Transferred from Local Government to Bondholders

06/25/12

FHFA has sued the State of Illinois and some local government units claiming that Fannie Mae and Freddie Mac are exempt from state and local real estate transfer taxes. FHFA's argument is basically that the GSEs are subject only to non-discriminatory real estate taxes and real estate transfer taxes aren't real estate taxes.  

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Eaton v. Fannie Mae Analysis

06/22/12

The Massachusetts Supreme Judicial Court finally issued its long-awaited ruling in Eaton v. Fannie Mae. This case involved the question of whether a "naked mortgagee"--a mortgagee that was not also the holder of the promissory note--had standing to foreclose.

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