The Mortgage Finance Bubble: Causes and Corrections

Hendershott, Patric; Hendershott, Robert; Shilling, James
January 2010
Journal of Housing Research;2010, Vol. 19 Issue 1, p1
Academic Journal
The article discusses the growth of mortgage transactions from 1997-2007 in the U.S. It highlights the conduct of the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and how private-label securitization of "junk" loans contributed to the growth of mortgage debt. Causes of the mortgage finance bubble including the failure of the private sector to assess mortgage default risk are discussed.


Related Articles

  • GOVERNMENT-SPONSORED ENTERPRISES AND INCOME FALSIFICATION ON MORTGAGE APPLICATIONS. DiLellio, James; Forsyth, Joetta // International Journal of Business, Accounting, & Finance;Spring2014, Vol. 8 Issue 1, p34 

    This study examines income falsification on mortgage applications during the housing bubble using a measure of income falsification called "clusters." The cluster measure is based on the tendency of people to pick similar numbers, including rounded numbers. Reported income on mortgage...

  • GSE Buybacks Will Increase. Collins, Brian // National Mortgage News;8/17/2009, Vol. 33 Issue 45, p11 

    The article reports on the move of Fannie Mae and Freddie Mac to prepare for higher mortgage defaults and expect forcing their seller/servicers to buy back more loans in the coming quarters. According to the article, lenders that sell loans to both companies are required to prove that the loan...

  • Principles for Reforming the Housing Finance Market. Wallison, Peter; Pinto, Ed; Pollock, Alex // National Mortgage News;4/4/2011, Vol. 35 Issue 27, p4 

    In this article the authors discuss the four basic principles for reforming the housing finance market in the U.S. They note that the housing finance market should function without any direct government financial support and ensure that the mortgages are distributed with prime quality. They add...

  • Comments.  // Brookings-Wharton Papers on Urban Affairs;2007, Issue 8, p191 

    The article offers various comments on a study on the role and effects of government-sponsored enterprises (GSEs) on mortgage market, resource allocation and urban economies in the U.S. The comment by Lawrence J. White provides background information on modern residential mortgage finance, as...

  • Session On GSEs, Housing And Risk-Taking Gets Nasty. Bergquist, Erick; Blackwell, Rob // American Banker;3/15/2004, Vol. 169 Issue 50, p20 

    The Thursday-evening panel at the National Community Reinvestment Coalition's annual conference saw mortgage industry U.S. lobbyists and representatives from the government-sponsored enterprises (GSEs) accusing each other of bad faith. It was ironic to hear lobbyists like Mike House, the...

  • Comparing International Housing Finance Systems. Pollock, Alex // National Mortgage News;10/11/2010, Vol. 35 Issue 3, p4 

    In this article, the author compares international housing finance systems. It states that the country's housing finance system is more remarkable compared to other countries because of the dominant and disproportionate role played by government-sponsored enterprises, Fannie Mae and Freddie Mac....

  • Housing Finance Emerges. What Now? Pollock, Alex J. // American Banker;7/5/2012, Vol. 177 Issue 103, p8 

    The article presents the author's opinion that U.S. housing finance is a market that intertwines government and politics and it will become less effective and more expensive because of government intervention and procyclical regulation. The insolvency of housing finance agencies Fannie Mae and...

  • Freddie CEO Puts the Focus on Boosting Single-Family Business. Collins, Brian // American Banker;11/7/2014, Vol. 179 Issue F343, p21 

    The article reports on the government-sponsored enterprise (GSE) Federal Home Loan Mortgage Corporation's (Freddie Mac) acquisition of Federal National Mortgage Association's (Fannie Mae) market share. Topics discussed include the increase in Freddie Mac's number of purchased single-family...

  • Retrofitting the GSEs: Can Be Done, Should Be Done Right. Berliner, Bill // National Mortgage News;5/7/2012, Vol. 36 Issue 32, p1 

    The article offers the author's view regarding the future of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac in the U.S. The author believes that the GSEs can be overhauled to serve as the basis for a new mortgage system backed by private capital. He stresses that the useful...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics