Homeownership and Nontraditional and Subprime Mortgages

Subprime Outcomes: Risky Mortgages, Homeownership Experiences, and Foreclosures

Optimal Stopping and Losses on Subprime Mortgages

Lender losses on mortgage loans arise from a two-stage process. In the first stage, the borrower stops making payments if and when default is optimal. The second stage is a lengthy and costly period during which the lender employs legal remedies to obtain possession and execute a sale of the collateral. This research uses data on subprime mortgage losses to explore the role of borrower and coll...

The Canary in the Coal Mine: Subprime Mortgages, Mortgage-Backed Securities, and the US Housing Bust

Introduction Recent events in the residential mortgage industry have verified what many of us expected all along: that the bursting of the housing bubble is already exerting dramatic and wide-ranging pressure on the US economy. As the housing market continues to decline, consumer spending will contract and financial institutions will suffer as housingrelated financing instruments take the plunge.

Foreclosures of Subprime Mortgages in Chicago: Analyzing the Role of Predatory Lending Practices

A dramatic rise in subprime foreclosures over the past several years has led to calls for restrictions of, or prohibitions against, a range of lending practices loosely termed “predatory.” Several cities and states have enacted legislation or regulations aimed at eliminating predatory practices, and some advocacy groups have endorsed action nationally. This working paper uses data from the Chic...

The Unraveling of the American Dream

Based in large part on the increased availability of new mortgage products that were often aggressively marketed to minority households, a generally healthy economy, and government policies that encouraged homeownership, a substantial number of Black, Hispanic, and foreign-born households became homeowners in the last 15 years. As a result, the homeownership rates for these demographic groups r...