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CMBS Subordination, Ratings Inflation, and the Crisis of 2007-2009

Stanton, Richard - 2013

This paper analyzes the performance of the commercial mortgage-backed security (CMBS) market before and during the … mortgage market) the loans underlying CMBS did not significantly change their characteristics during this period, commercial … and 1980s and, overall, the CMBS and CMBX markets performed as normal during the financial crisis (at least by the …

Persistent link: https://www.econbiz.de/10013094466

Credit Frictions in the Great Recession

Kehoe, Patrick J.; Lopez, Pierlauro; Midrigin, Virgiliu; … - 2022

Although a credit tightening is commonly recognized as a key determinant of the Great Recession, to date, it is unclear whether a worsening of credit conditions faced by households or by firms was most responsible for the downturn. Some studies have suggested that the household-side credit...

Persistent link: https://www.econbiz.de/10013404422

The Subprime Panic

Gorton, Gary - 2008

Understanding the ongoing credit crisis or panic requires understanding the designs of a number of interlinked securities, special purpose vehicles, and derivatives, all related to subprime mortgages. I describe the relevant securities, derivatives, and vehicles to show: (1) how the chain of...

Persistent link: https://www.econbiz.de/10012769874

Breaking the Spell with Credit-Easing : Self-Confirming Credit Crises in Competitive Search Economies

Gaballo, Gaetano - 2016

We show that credit crises can be Self-Confirming Equilibria (SCE), which provides a new rationale for policy interventions like, for example, the FRB's TALF credit-easing program in 2009. We introduce SCE in competitive credit markets with directed search. These markets are efficient when...

Persistent link: https://www.econbiz.de/10012998414

Did Capital Requirements and Fair Value Accounting Spark Fire Sales in Distressed Mortgage-Backed Securities?

Merrill, Craig B. - 2012

Much attention has been paid to the large decreases in value of non-agency residential mortgage-backed securities (RMBS …

Persistent link: https://www.econbiz.de/10013102712

The Real Effects of Liquidity During the Financial Crisis : Evidence from Automobiles

Benmelech, Efraim - 2016

Illiquidity in short-term credit markets during the financial crisis might have severely curtailed the supply of non-bank consumer credit. Using a new data set linking every car sold in the United States to the credit supplier involved in each transaction, we find that the collapse of the...

Persistent link: https://www.econbiz.de/10012994914

The Mortgage Rate Conundrum

Justiniano, Alejandro - 2017

We document the emergence of a disconnect between mortgage and Treasury interest rates in the summer of 2003. Following … the end of the Federal Reserve expansionary cycle in June 2003, mortgage rates failed to rise according to their … historical relationship with Treasury yields, leading to significantly and persistently easier mortgage credit conditions. We …

Persistent link: https://www.econbiz.de/10012948080

The Anatomy of a Residential Mortgage Crisis : a Look Back to the 1930s

Snowden, Kenneth A. - 2010

Looking back to the 1930s provides the opportunity to examine one severe mortgage crisis as we live through another …. This paper examines the development of the residential mortgage market during the 1920s, the institutional disruptions that … development of the residential mortgage market and led to a postwar system in which portfolio lenders dominated both local and …

Persistent link: https://www.econbiz.de/10013139742

Leverage and the Foreclosure Crisis

Corbae, Dean - 2013

How much of the recent rise in foreclosures can be explained by the large number of high-leverage mortgage contracts … originated during the housing boom? We present a model where heterogeneous households select from a set of mortgage contracts and … choose whether to default on their payments given realizations of income and housing price shocks. The set of mortgage …

Persistent link: https://www.econbiz.de/10013077660

Forbearance by Contract : How Building and Loans Mitigated the Mortgage Crisis of the 1930s

Fleitas, Sebastián - 2015

During the Great Depression, Building and Loans (B&Ls), the leading home lenders, had a structure that mitigated the crisis. Borrowers were owners of the B&L and dissolution of the institution required a two-thirds majority vote. Using panel data from New Jersey in the 1930s, we find that this...

Persistent link: https://www.econbiz.de/10013010293