Introduction to Special Issue: Government Involvement in Residential Mortgage Markets

Frame, W. Scott

doi:10.1111/1540-6229.12122

Cited by 2 publications

(1 citation statement)

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“…During the 2007–2009 Great Recession, the federal government introduced new policies and programs that focused on mortgage debt relief and mortgage refinancing, particularly for households that had experienced large declines in home values (Frame 2015). In particular, the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP) targeted homeowners who had experienced losses in income, unaffordable increases in expenses or declines in home values.…”

Section: Introductionmentioning

confidence: 99%

FHA, Fannie Mae, Freddie Mac and the Great Recession

Passmore

Sherlund

2019

Real Estate Economics

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Did government mortgage programs mitigate the adverse economic effects of the financial crisis? We find that counties with greater participation in traditional government mortgage programs experienced less severe economic downturns during the Great Recession. In particular, counties with higher levels of participation in FHA, Fannie Mae, and Freddie Mac lending had relatively smaller increases in mortgage delinquency rates; smaller declines in purchase originations, home sales, home prices, and new automobile purchases; and smaller increases in unemployment rates. These results hold both in 2009 (soon after the peak of the financial crisis) and in 2014 (six years after the crisis). The persistence of better economic outcomes in these counties is consistent with a view that mortgage originators' access to a liquidity outlet (in this case, government-backed securitization) is key to maintaining credit flows and economic growth during financial turmoil.

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Section: Introductionmentioning

confidence: 99%