sset securitization — transforming illiquid assets into tradable securities — is a large and growing market, even rivaling the corporate debt market in size. While the underlying assets can be very different — ranging from song royalties to home mortgages — most asset-backed securities nevertheless share some distinctive features. In “The Economics of Asset Securitization,” Ronel Elul explains ...

Markets for domestic housing in countries like England differ from other markets because the stock is fixed in the short term, buyers need to raise mortgages to finance their purchases and prices tend to be set through intermediaries (‘estate agents’ or realtors). We introduce an agent-based model in which some of the main features of the English market emerge from interactions between buyers, ...

Financial reform legislation passed by Congress in 2010 requires mortgage originators to retain some loss exposure on the mortgages they securitize. Recent research compares the performance of mortgage-backed securities for different types of issues in which originators retain different degrees of loss exposure. The findings suggest that retention of even modest loss exposure by originators red...

Choosing a mortgage is one of the biggest financial decisions an American consumer will make. Yet it can be a complicated one, especially in today’s environment where mortgages vary in dimensions and unique features. This complexity has raised regulatory issues. Should some features be regulated? Should product disclosure be regulated? And most basic of all, is there a rationale for regulation ...

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...

To understand the relative importance of various incentives for subprime borrowers to default on their mortgages, we build an econometric model that nests various potential drivers of borrower behavior. We allow borrowers to default on their mortgages either because doing so increases their lifetime utility or because of the borrowers’ inability to pay, treating the decision as the outcome of a...