The reallocation of mortgage debt to low-income or marginally qualified borrowers plays a central role in many … explanations of the early 2000s housing boom. We show that such a reallocation never occurred, as the distribution of mortgage debt … with respect to income changed little even as the aggregate stock of debt grew rapidly. Moreover, because mortgage debt …

risk in the mortgage market raises the default rate and spreads to the rest of the economy, creating a recession. In our … model two shocks are well suited to replicate the subprime crisis and the Great Recession: the mortgage risk shock and the …. This policy is successful in stabilizing the mortgage market and makes all agents better off. …

constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical … fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing boom to …

lending constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical …, and the fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing …