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Although the homeownership rate rose from 65 percent in 1995 to 69 percent in 2005, this rise appears difficult to sustain. We argue that the development of new shared-equity mortgages (SEMs) that blur the lines between debt and equity would propel further advances in homeownership. The rationale for these mortgages is that the broad financial markets would value shares in individual housing returns more highly than hard-pressed prospective homeowners do.We describe a new class of SEMs and provide survey evidence that most households would prefer them to interest-only and other currently popular mortgages. Financial simulations confirm the value of the securitized SEMs to investors. We present computations suggesting that an increase in the overall U.S. homeownership rate of between 1% and 1.5% would likely result from the development of SEM markets.

Foreclosures have disproportionately affected minority borrowers and communities. Many academic studies have focused either on the nation as a whole or on specific metropolitan areas, but few have concentrated on the nation's capital. Using a merged dataset consisting of Home Mortgage Disclosure Act (HMDA), US Census, and Lender Processing Services (LPS) data and utilizing a logistic regression model, we analyse the likelihood of foreclosure in the Washington, DC metropolitan area. We find that high-income African-American borrowers are 36 per cent and Hispanic borrowers 79 per cent more likely to go into foreclosure, controlling for key financial variables. Moreover, we find that exotic mortgage products, such as adjustable rate mortgages (ARMs), high-cost mortgages, balloon mortgages and interest-only mortgages, have a higher likelihood of foreclosure than standard 30-year fixed rate mortgages.Foreclosure, minorities, housing equity, US, Washington, DC metropolitan area, logistic regression,

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