The real consequences of bank mortgage lending standards

Vojtech, Cindy M.; Kay, Benjamin S.; Driscoll, John C.

doi:10.1016/j.jfi.2019.100846

Cited by 17 publications

(11 citation statements)

References 33 publications

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“…This is consistent with other articles finding that supply‐driven changes in credit have real effects on home prices, such as Favara and Imbs (), Mian and Sufi (), Adelino, Schoar, and Severino (), Favara and Imbs (), DiMaggio and Kermani (), Anenberg et al. (), Vojtech, Kay, and Driscoll (), Passmore and Sherlund (), and Kung ().…”

supporting

confidence: 91%

“…Related work includes Favara and Imbs (), Mian and Sufi (), Adelino, Schoar, and Severino (), Berrospide, Black, and Keeton (), Glancy (), Anenberg et al. (), Vojtech, Kay, and Driscoll (), Gropp, Krainer, and Laderman (), Gete and Reher (), Haltenhof, Jung Lee, and Stebunovs (), Chen, Hanson, and Stein (). Only a handful of papers focus on the employment effects of reductions in mortgage supply.…”

mentioning

confidence: 99%

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Employment in the Great Recession: How Important Were Household Credit Supply Shocks?

García

2019

J of Money Credit Banking

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I pool data from all large multimarket lenders in the United States to estimate how many of the over 7 million jobs lost in the Great Recession can be explained by reductions in the supply of mortgage credit. I construct a mortgage credit supply instrument at the county level, the weighted average (by prerecession mortgage market shares) of liquidity‐driven lender shocks during the recession. The reduction in mortgage supply explains about 15% of the employment decline. The job losses are concentrated in construction and finance.

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supporting

confidence: 91%

mentioning

confidence: 99%

Employment in the Great Recession: How Important Were Household Credit Supply Shocks?

García

2019

J of Money Credit Banking

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“…As these counties were more reliant on privately funded mortgages, they experienced larger shocks to mortgage credit in terms of underwriting standards, credit risk pricing and liquidity premiums. We find that the resultant credit supply shock had large, adverse effects on purchase originations and house prices, similar to the results of García (2019), Johnson (2019), Mondragon (2017) and Vojtech, Kay and Driscoll (2019). Counties more reliant on government mortgage programs prior to the financial crisis sustained smaller shocks to mortgage credit and smaller declines in purchase originations and house prices.…”

Section: Dose–response Functionssupporting

confidence: 86%

“…(2016) find that increases in mortgage credit supply increased house prices and residential construction, and Johnson (2019) concludes that relaxed underwriting standards led to higher house prices. Vojtech, Kay and Driscoll (2019) show that tighter underwriting standards reported at banks increased denial rates, reduced house prices and reduced future delinquency rates. DiMaggio and Kermani (2017) and Favara and Imbs (2015) conclude that banking deregulation before the financial crisis increased mortgage credit supply and house prices during the boom, while Gete and Reher (2018) find that decreases in mortgage credit supply resulted in higher rents.…”

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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“…This was also reflected in the legislative acts of those times: the Russian Civil Code, the German Civil Code, and also the Italian and Austrian laws, which at that time referred to the pledge as real rights. The real nature of the pledge was justified, first of all, by the fact that the right of pledge always follows the thing regardless of the change of owner [6].…”

Section: Resultsmentioning

confidence: 99%

Mortgage and mortgage lending as a tool for financial recovery of the modern Russian economy

Rybak

2021

E3S Web Conf.

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The article is devoted to the institutional analysis of the problem of improving the legal regulation of mortgage relations in Russia in modern conditions in the presence of a rather limited financial capacity of the population in modern conditions to purchase real estate or housing. In this regard, the mortgage becomes the most necessary tool to ensure the socio-economic development of society, its stable and sustainable development. The formation of the property base currently generates a corresponding demand in the real estate market, and develops a corresponding interest among consumers in mortgage lending. At the same time, the emerging financial mechanism of mortgages also ensures the formation of the solvency of not only the population, but also other market participants, so that this market segment becomes not only in demand, but also successfully developed. Considering this problem, the author sought to update the scientific, theoretical and practical interest in this topic and to reveal the problems that hinder the development of mortgages as an important factor in the financial recovery of the modern market economy.

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The real consequences of bank mortgage lending standards

Cited by 17 publications

References 33 publications

Employment in the Great Recession: How Important Were Household Credit Supply Shocks?

Employment in the Great Recession: How Important Were Household Credit Supply Shocks?

FHA, Fannie Mae, Freddie Mac and the Great Recession

Mortgage and mortgage lending as a tool for financial recovery of the modern Russian economy

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