We study the effect of Department of Justice lawsuits in the 2010s against large lenders for alleged fraud in the Federal Housing Administration (FHA) mortgage insurance program. The suits led to more than $5 billion in settlements and caused targeted banks and their peers to precipitously exit...

Despite the "interest rate turnaround" initiated by the ECB in the second half of 2022 as a late reaction to the clearly underestimated persistence of high inflation rates in the euro area, real interest rates are by no means to be regarded as restrictive, neither in the ex post nor in the ex...

We document that increases in property insurance premiums reduce mortgage originations. The effect is strongest for the rate refinancing and cash-out refinancing segments. We show that denials associated with increased premiums are significantly more likely attributed to high debt-to-income...

Population aging and the sustainability of retirement financing are critical challenges facing many developed economies. In South Korea, elderly poverty remains a critical issue, despite widespread homeownership among older adults. Although the home pension program allows retirees to unlock...

Using information from the ECB's Bank Lending Survey, we examine how the implementation of borrower-based macroprudential measures (BBMs) between 2009-Q1 and 2023-Q3 affected mortgage lending standards in a sample of 15 euro area countries. We find that banks generally tightened credit standards...

This paper explores ways in which borrower-based measures (BBMs) could be applied to commercial real estate (CRE) lending, focusing on suitable metrics and scope. BBMs have already proven to be effective in mitigating credit risks in residential real estate lending by curbing excessive credit...

We calibrate a lifecycle portfolio-choice model of homeowners facing uninsurable income risk to show that tax deductions for mortgage interest payments and voluntary pension contributions have sizable effects on household portfolios and macroprudential risks. The deductions reduce the after-tax...

How borrowers respond to future changes in the interest rate on their debt matters for the transmission of monetary policy and for household financial stability. Combining bank data, a letter RCT, and a survey, we study this question in the context of the German mortgage market, where since 2022...

How borrowers respond to future changes in the interest rate on their debt matters for the transmission of monetary policy and for household financial stability. Combining bank data, a letter RCT, and a survey, we study this question in the context of the German mortgage market, where since 2022...

We calibrate a lifecycle portfolio-choice model of homeowners facing uninsurable income risk to show that tax deductions for mortgage interest payments and voluntary pension contributions have sizable effects on household portfolios and macroprudential risks. The deductions reduce the after-tax...

We study how households choose between three mortgage contracts with different payment structures: fixed-rate fixed-payment, variable-rate variable-payment, and a hybrid variable-rate fixed-payment mortgage where interest rate changes affect principal repayment rather than payment size. This...

The family home is the most important asset on household balance sheets, aside from human capital. Choosing a suitable mortgage is therefore critical to financial well-being but households often make costly mistakes. We collect data in an online survey to test borrowers' comfort with, and...

Using administrative data on mortgages issued in Italy between 2018 and 2019, this paper estimates loan demand elasticities to maturity and interest rate. We find that households are responsive to both contract terms: a 1% decrease in interest rate increases the average loan size by 0.22%...

Physical climate risks can have a large regional impact, which can influence mortgage loans' credit risk and should be priced by the lenders. Motivated by the relevance of climate change for financial intermediaries, our paper aims at analysing if physical climate risks are being reflected in...

Macroprudential policies are a key policy tool for financial regulators, but concerns persist that these policies restrict access to homeownership. I examine this concern using crosscountry data on homeownership for 28 countries. I find little evidence that macroprudential policies reduce...