Brookings: Topics - Mortgage Market

How We're Doing: What's Blocking the Recovery

Sun, 15 Nov 2009 00:00:00 GMT

Despite the economy’s expansion in the last quarter, many American workers still lack jobs, the confidence to spend or a home to call their own. A team of Brookings experts began tracking data early this year to assess various dimensions of national and international well-being. The second quarterly "How We’re Doing" index looks at forces that stand in the way of a strong rebound and asks, "where are we going?"

Karen Dynan and Alan Berube Comment on the Second “How We’re Doing” Index

Thu, 12 Nov 2009 13:39:00 GMT

Despite the economy’s expansion last quarter, many American workers still lack jobs, the confidence to spend money or a home to call their own. Brookings scholars have been tracking data on various dimensions of national and international well-being since early this year. Karen Dynan and Alan Berube examine the findings in the second Brookings “How We’re Doing” Index.

The Scouting Report Web Chat: Extending the Homebuyer Tax Credit

Wed, 11 Nov 2009 00:00:00 GMT

On Wednesday, November 11, Ted Gayer and Fred Barbash participated in a live web chat on the extended homebuyer tax credit, debating whether or not President Obama should have let it expire.

The Scouting Report: Extending the Homebuyer Tax Credit

Wed, 11 Nov 2009 12:30:00 GMT

Event Information:

November 11, 2009, 12:30 PM to 1:30 PM

President Obama approved the expansion and extension of the homebuyer tax credit initially approved as part of the economic stimulus package. While this move is intended to spur home sales, many experts argue that extending the tax credit is bad policy. On Wednesday, November 11, Ted Gayer and Politico Senior Editor Fred Barbash will be online to answer your questions about the homebuyer tax credit in a live web chat.

Designing Loan Modifications to Address the Mortgage Crisis and the Making Home Affordable Program

Fri, 30 Oct 2009 00:00:00 GMT

In order to shore up the housing market and prevent foreclsoures, the government has instituted the Home Affordable Modification Program (HAMP). Larry Cordell, Karen Dynan, Andreas Lehnert, Nellie Liang and Eileen Mauskopf find that HAMP's key features should alleviate some of the previous obstacles to successful loan modifications. But, they say, the program is not well-suited to address payment problems associated with job loss, and they believe focusing on reducing payments rather than principal is ineffective when the homeowner has negative equity, with short sales being a better option.

Housing Sales Flat, Risk Remains

Wed, 30 Sep 2009 14:56:26 GMT

New U.S. home sales were flat in August and existing home sales fell, showing that the housing sector still remains weak. Ted Gayer, co-director of Economic Studies, says there has been some housing stabilization thanks to the Federal Reserve, but that there is still downside risk in the market. Costly tax incentives to encourage homeownership have long-term budget consequences.

The Government Takeover of Fannie Mae and Freddie Mac

Thu, 03 Sep 2009 16:50:10 GMT

It’s been one year since Fannie Mae and Freddie Mac had to be taken over by the government to prevent their collapse. Ted Gayer talks about what went wrong and why these government-sponsored enterprises were treated as "too big to fail."

Economic Fears Lead to a Surge in Household Saving

Tue, 14 Jul 2009 00:00:00 GMT

For many years, economists and other experts have bemoaned American consumers’ unwillingness to save. Now Americans are saving once again, and observers worry that too much saving translates directly into too little consumer demand. Gary Burtless examines whether consumer saving was too low in the past and whether this new saving pattern will continue.

Addressing Ohio's Foreclosure Crisis: Taking the Next Steps

Fri, 05 Jun 2009 00:00:00 GMT

Facing the worst foreclosure crisis since the Great Depression, the state of Ohio has responded by focusing on helping individuals keep their homes. Ohio must direct more attention and more resources to the devastating effects that foreclosures are having on entire communities, from the urban neighborhoods of Cleveland or Cincinnati to suburban and rural communities across the state.

Foreclosures and Stimulus: What’s At Stake for America’s Neighborhoods

Mon, 09 Feb 2009 00:00:00 GMT

The final House-Senate compromise on the economic recovery package offers no boost for HUD’s Neighborhood Stabilization Program, established last year to help state and local governments mitigate the impact of foreclosures. Alan Berube and Alan Mallach argue that additional funds for the program (part of the House proposal omitted in the final bill) would provide much-needed assistance to local communities.

Stabilizing Communities: A Federal Response to the Secondary Impacts of the Foreclosure Crisis

Tue, 03 Feb 2009 00:00:00 GMT

The wave of home mortgage foreclosures that began in 2006 continues to surge, greatly destabilizing neighborhoods, towns, and cities across the United States. However, the federal government has played a limited role to date in blunting its effects. This Blueprint policy brief argues for carefully-targeted federal policies to assist states and localities in mitigating the community-level impacts of foreclosure, and creating the conditions for ultimate housing market recovery.

Land Banking as Metropolitan Policy

Tue, 28 Oct 2008 00:00:00 GMT

A new Blueprint paper argues that the rising number of vacant and abandoned properties around the nation requires a more robust drive by the federal government to aid states and localities in land banking. The author, Frank Alexander of Emory University, recommends that federal policy should better capitalize local and regional land banking (the process or policy by which local governments acquire surplus properties and convert them to productive use), encourage code reform and regional collaboration.

Shoring Up the Economy

Tue, 14 Oct 2008 16:24:38 GMT

The federal government’s decision to take equity stakes in private banks to help shore up the battered economy is a step in the right direction, Barry Bosworth says, and he adds that more needs to be done – particularly on the housing front.

Making the Rescue Package Work: Asset and Equity Purchases

Fri, 10 Oct 2008 00:00:00 GMT

With fears of a global recession pounding markets worldwide, many are watching closely to see if the U.S. Treasury can quickly implement the recent bailout package in a way that stabilizes the financial markets and unfreezes credit. Brookings experts Martin Baily and Robert Litan take a look at the Treasury Department’s chances of success and argue that the omens thus far are “not encouraging."

Lessons From the Financial Crisis

Mon, 06 Oct 2008 00:00:00 GMT

As part of our ongoing series covering the financial crisis, Martin Baily, director of IBPP delivered a presentation at the NABE Meeting on October 6, 2008 on the cause of the current financial crisis and the domino effect that permeated the financial markets, and provided measures to be implemented to prevent another financial institution meltdown.

Facilitating Shared Appreciation Mortgages to Prevent Housing Crashes and Affordability Crises

Tue, 23 Sep 2008 00:00:00 GMT

If current trends continue, today’s default crisis will soon be followed by an affordability crisis as an ever-increasing number of American households find themselves locked out of credit and unable to transition to homeownership. In this paper, Andrew Caplin, Nöel Cunningham, Mitchell Engler and Frederick Pollock argue that development of shared appreciation mortgage (SAM) markets would moderate the impending decline in homeownership and lower the risk of future housing crashes.

Getting More from Low-Income Housing Assistance

Tue, 23 Sep 2008 00:00:00 GMT

In this paper, Edgar Olsen argues that the two most serious structural shortcomings of the current system of low-income housing assistance are (1) its excessive reliance on unit-based assistance and (2) its failure to provide housing assistance to all of the poorest eligible families who ask for help.

The Future of Housing and Credit Markets

Tue, 23 Sep 2008 08:45:00 GMT

Event Information:

September 23, 2008, 8:45 AM to 12:00 PM

Turmoil in the U.S. housing and financial markets continues, as evidenced by the recently announced rescue plan for mortgage giants Fannie Mae and Freddie Mac and the latest financial turmoil involving Lehman Brothers, Merrill Lynch and AIG. On September 23, The Hamilton Project released three new discussion papers and hosted a three-panel policy discussion on various aspects of the housing and credit markets.

An Opt-Out Home Mortgage System

Tue, 23 Sep 2008 00:00:00 GMT

The causes of the mortgage meltdown are myriad and the solutions likely to be multifaceted, but a central problem that led to the crisis was that brokers and lenders offered loans that looked much less expensive and much less risky than they really were. In this paper, Michael Barr, Sendhil Mullainathan and Eldar Shafir propose a sticky opt-out mortgage system, under which lenders would be required to offer borrowers loans with standard terms.

A Brief Guide To Fixing Finance

Mon, 22 Sep 2008 00:00:00 GMT

Martin Baily and Robert Litan analyze the long-term implications of recent and proposed government efforts to stabilize the markets and the economy at large. As Congress considers legislation this week, Baily and Litan stress the importance of understanding how and why the dominoes fell, and most important, they advocate important systemic fixes: transparency, institutional liquidity and better oversight and tools given to regulators.

Government Bailout: Changing the Face of Capitalism

Wed, 17 Sep 2008 00:00:00 GMT

In the wake of the federal bailouts of Bear Stearns, Fannie Mae, Freddie Mac and AIG—yet no lifeline for Lehman Brothers—serious institutional questions have arisen about the government’s role in the overall economy and where Uncle Sam draws the line. Robert Litan examines the ever-changing situation and whether these actions have changed the face of capitalism as Americans know it.

The Fannie Mae and Freddie Mac Rescue Plan

Mon, 08 Sep 2008 00:00:00 GMT

Douglas Elmendorf offers his views on the federal government's plan, announced on September 7, to take control of troubled mortgage lenders Fannie Mae and Freddie Mac. He says "it ensures that the government has full control over the enterprises so that long-run decisions about our system of housing finance can be made in the best interest of society as a whole."

The Fannie Mae and Freddie Mac Takeover

Mon, 08 Sep 2008 13:50:36 GMT

The Treasury Department’s decision to place Fannie Mae and Freddie Mac in a conservatorship could signal a turning point in the credit crisis that has troubled investment banks for nearly a year. Brookings fellow and former OMB Deputy Director Alice Rivlin examines the impact and the importance of the action.

Mortgaged to the World

Tue, 29 Jul 2008 00:00:00 GMT

Martin Mayer argues that Congress has given the Bush White House yet another chance to operate outside the Constitution by giving Treasury Secretary Henry Paulson the go-ahead for his two-part plan to salvage Fannie Mae and Freddie Mac, the government-sponsored mortgage companies — a blueprint that violates fundamental American principles in two worrisome ways.

Do We Want Fannie Mae Public or Private?

Fri, 18 Jul 2008 00:00:00 GMT

Recent government efforts to shore up Fannie Mae and Freddie Mac reveal the ambivalence of Americans towards whether these mortgage giants should be more like private corporations or public utilities. Alice Rivlin suggests that, if taxpayers put credit on the line and take the risk of losing, they should also be allowed to share in the gains. She suggests at least partial government ownership and public appointees to the Board.

Older Cities Hold On to More People, Census Shows

Thu, 10 Jul 2008 00:00:00 GMT

High gas prices and the housing market slowdown are reversing past population declines for older U.S. cities, new Census data show. William Frey writes that the South and interior West still contain most of the nation’s fastest-growing cities. But older cities like Boston, Chicago and St. Paul began adding residents again in the past year, as formerly hot destinations like Phoenix, Dallas and Las Vegas began to cool off.

Missing Markets: Fostering Market Based Solutions to Major Risks

Thu, 05 Jun 2008 09:30:00 GMT

Event Information:

June 05, 2008, 9:30 AM to 12:00 PM

Hurricanes, retirement, home-buying and tax-base erosion all pose financial risks. Yet markets to reduce these risks are elusive. The Hamilton Project at Brookings released papers at a discussion on how sound public policy can play a critical role in helping to foster new markets or expand existing markets in ways that could provide widely shared benefits.

Tackling the Mortgage Crisis: 10 Action Steps for State Government

Thu, 29 May 2008 00:00:00 GMT

The mortgage foreclosure crisis has become an issue of growing concern over the past two years, particularly in many older industrial communities. Alan Mallack proposes a set of 10 action steps that state leaders can take to help mitigate its impact on families and neighborhoods—and prevent a similar situation from occurring in the future.

State and Federal Policy in the Foreclosure Crisis

Wed, 28 May 2008 00:00:00 GMT

The following remarks were delivered by Alice Rivlin during a luncheon speech at the State on Foreclosures and Housing Solutions hosted by the National Governors Association. Illustrating the effects of both the credit and foreclosure crisis providing reasons for optimis in the current state of the economy.

The Great Credit Squeeze: How It Happened, How to Prevent Another

Fri, 16 May 2008 00:00:00 GMT

With the U.S. financial system still in a perilous state, Martin Baily, Doug Elmendorf and Bob Litan diagnose what caused the crisis and offer prescriptions for policy change. The authors of this new Brookings paper address two challenges: to resolve the immediate problems and to reduce the likelihood that these problems recur.

How the Great Credit Squeeze Happened and How to Prevent Another

Fri, 16 May 2008 10:00:00 GMT

Event Information:

May 16, 2008, 10:00 AM to 12:00 PM

How could America's sophisticated financial system go so wrong and cause so much damage? Martin Baily, Douglas Elmendorf and Robert Litan answered that question in a new paper released at this public forum. The authors, following opening remarks by FDIC Chairman Sheila Bair, put forward a specific agenda of policy actions to reduce the chance that history repeats itself.

Reducing the Likelihood of Financial Crisis

Wed, 14 May 2008 00:00:00 GMT

Even though billions of dollars of mortgage-related loses have yet to be declared, Doug Elemendorf offered Joint Economic Committee members four principles to guide reform of the troubled financial system. His diagnosis and prescriptions are based on a new Brookings report to be released Friday.

Affordable Housing, Rental Housing and Home Ownership

Wed, 23 Apr 2008 11:48:21 GMT

Despite the fact that one-third of all Americans live in rental housing, rental policy often takes a back seat to home-ownership policy in Washington. To ensure that low- and moderate-income Americans can afford rental housing, Bruce Katz says that the next president needs to help supplement incomes, empower local governments to expand the supply of affordable housing and deal with the subprime mortgage crisis.

Financial Innovation and Housing: Implications for Monetary Policy

Mon, 21 Apr 2008 00:00:00 GMT

By examining the IMF's World Economic Outlook, Senior Fellow Doug Elmendorf, discusses ways in which innovations in housing finance around the world might change the way monetary policy deals with housing developments in the future.

Policies for Tackling the Mortgage Mess

Thu, 10 Apr 2008 00:00:00 GMT

Congress and the administration are moving forward in myriad ways to boost beleaguered homeowners and put the economy back on track. Doug Elmendorf, testifying before the Senate, urged policy-makers to expand the role of the Federal Housing Administration to help families in trouble refinance their mortgages, and offered comments on the compromise Senate housing bill.

Take Time to Get It Right: Shape Financial System Rules for the Long Haul

Sun, 06 Apr 2008 00:00:00 GMT

The financial regulatory infrastructure that started during the Civil War is now an "alphabet soup" of agencies, and it suffers from duplication in some areas and gaps in others. Jason Furman provides guidance on how policy-makers can build a more effective and stable financial system.

The Subprime Crisis and its International Consequences

Fri, 04 Apr 2008 12:00:00 GMT

Event Information:

April 04, 2008, 12:00 PM to 2:00 PM

With the problems in the subprime mortgage market having grown into a full-blown crisis of the international financial system, the conference brought together leading economists and practitioners to examine the questions of how this crisis happened and how to avoid a similar event in the future. The event featured such key figures as former Fed Chairman Paul Volcker, former French Prime Minister Michel Rocard, economists Martin Baily and Douglas Elmendorf of Brookings and Jean Tirole of Institut d’Économie Industrielle in Toulouse, and business leaders Michel Pébereau of BNP Paribas and Claude Bébéar of AXA and Institut Montaigne.

Addressing the Foreclosure Crisis

Fri, 14 Mar 2008 11:00:00 GMT

Event Information:

March 14, 2008, 11:00 AM to 1:00 p.m.

The Hamilton Project at Brookings hosted a discussion on proposed policy responses to the mortgage-foreclosure problem. Former U.S. Treasury Secretaries Robert E. Rubin and Lawrence H. Summers offered remarks. Panelists evaluated several specific proposals for ameliorating the mortgage-foreclosure problem and proposed next steps for consideration.

Weighing Alternative Policies for Tackling the Mortgage Mess

Fri, 29 Feb 2008 00:00:00 GMT

Without government action, mortgage foreclosures will rise steeply for the next several years, argues Doug Elmendorf. He analyzes the wide range of proposals for tackling this problem, arguing that policy-makers should weigh the fairness of alternative approaches and effects on future mortgage credit, as well as the consequences of inaction.

Monetary Policy and the State of the Economy

Tue, 26 Feb 2008 00:00:00 GMT

Alice M. Rivlin testified before Congress on the current economic situation and what policy makers can do to curb a possible future recession. "The Federal Reserve has used the tools in its limited arsenal aggressively and imaginatively and clearly indicated its intention do more if necessary," she said.

Inflating the Bubble?: This Isn't Your Parents' Mortgage Market

Wed, 30 Jan 2008 00:00:00 GMT

Will the economy get a much-needed boost from a stilmulus package? In a week long Los Angeles Times 'Dust Up' series, Jason Furman, a Brookings scholar and an advisor to President Clinton, and author-economist Steven E. Landsburg discuss the U.S. economy and the recently announced stimulus package.

Housing Bust Shatters State Migration Patterns

Fri, 28 Dec 2007 00:00:00 GMT

William Frey's analysis of the new Census Bureau annual estimates of state population changes for 2006-7 shows that the sinking housing market has yanked back high-flying states like Nevada and Arizona. An even bigger tug in growth occurred in Florida, another housing-boom driven state. With credit harder to get and the disappearance of housing deals, the allure of these states appears to have dimmed.

The State of the U.S. Economy

Wed, 19 Dec 2007 10:00:00 GMT

Event Information:

December 19, 2007, 10:00 AM to 12:00 PM

News on the sub-prime lending crisis and threats of a recession raise more questions than answers. On December 19 at Brookings, two leading voices on economic policy—former Treasury Secretary Lawrence Summers and New York Senator Charles Schumer—offered concrete policy suggestions to address the twin threats that face this nation’s economic health.

Opportunity 08: Better Direction on Main Street

Mon, 03 Dec 2007 10:15:00 GMT

Event Information:

December 03, 2007, 10:15 AM to 12:00 PM

From the individual alternative minimum tax (AMT) to an unstable mortgage market, many middle-class American families are at risk of losing their footing in today’s economy. Saving rates are at an all-time low and rising health premiums can render basic care unaffordable to even full-time workers. Opportunity 08 explores what the next President can and should do to promote individuals’ economic success and a sound middle class.

Was the Fed Too Easy for Too Long?

Tue, 13 Nov 2007 00:00:00 GMT

Some argue that the Federal Reserve has kept rates too low for too long, thus setting the stage for the housing boom-bust and financial turmoil. But the optimal policy one can imagine in hindsight would not have changed the course of events much, says Doug Elmendorf.

What Should Be Done to Help Households Facing Foreclosure?

Tue, 13 Nov 2007 00:00:00 GMT

More families face losing their homes in the coming year as payments rise and house prices fall. Doug Elmendorf suggests that the government should help households facing foreclosures, but through a carefully targeted strategy.

The Subprime Mortage Crisis and Central Banks: a Rock and a Hard Place

Sun, 11 Nov 2007 00:00:00 GMT

Brookings Scholar Urjit Patel examines the global effects of the US sub-prime market crisis on central banks.

Credit Crisis: The Sky is not Falling

Wed, 31 Oct 2007 00:00:00 GMT

Despite troubles in the subprime mortgage industry, an otherwise healthy economy should avert a true credit crisis. This brief describes how there is no shortage of capital and why bailing out the lenders would merely encourage them to do it again.

Q&A on Recent Financial Market Disruptions

Mon, 08 Oct 2007 16:54:20 GMT

Senior Fellow Douglas Elmendorf explains the roots of the crisis surrounding the rising sub-prime mortgage default rate and suggests that a greater financial literacy would be useful to homeowners and prospective homeowners.

Recent Financial Market Disruptions

Wed, 26 Sep 2007 09:30:00 GMT

Event Information:

September 26, 2007, 9:30 AM to 11:30 AM

As the nation faces what might turn out to be the worst liquidity crisis around housing in 50 years, The Hamilton Project brought together former and current Treasury officials, Wall Street experts and others for a free-flowing discussion on the risks to the economy and to individual home owners.

Notes on Policy Responses to the Subprime Mortgage Unraveling

Fri, 21 Sep 2007 00:00:00 GMT

Doug Elmendorf offers a critical appraisal of recent policy responses to rising delinquencies and foreclosures of subprime mortgages. The Federal Reserve should reduce, but not slash, the federal funds rate, he argues.

Encouraging Homeownership Through the Tax Code

Mon, 18 Jun 2007 00:00:00 GMT

Bill Gale and co-authors advocate examine the mortgage interest deduction and argue for new proposals that would be less expensive, more progressive and more effective in encouraging homeownership.

The High Price of Easy Credit

Mon, 04 Jun 2007 00:00:00 GMT

The authors argue that the subprime mortgage problem is in part due to systemic gaps between what working families realistically need to know about borrowing options, and what they actually do know. The authors call for Congress to think through ways that working families can obtain trusted financial advice and information.

Borrowing to Get Ahead, and Behind: The Credit Boom and Bust in Lower-Income Markets

Fri, 11 May 2007 00:00:00 GMT

A new Brookings Institution, Metropolitan Policy Program study finds that the recent subprime implosion is only the tip of the iceberg when it comes to Americans borrowing more than they can manage. The study, written by Matt Fellowes, relies heavily on previously unavailable data, and finds that about one out of every three lower income borrowers falls behind on bill payments in a typical year, and over one out of every four now pays more than 40 percent of their income every year on debt payments.

Rethinking Affordable Housing Strategies

Thu, 22 Feb 2007 00:00:00 GMT

In his presentation at Housing Charlotte 2007, Bruce Katz discusses current housing challenges in Charlotte, principles of success, as well as where the city, and the nation, go from here.

Give Credit Where Credit is Due: Increasing Access to Affordable Mainstream Credit Using Alternative Data

Fri, 01 Dec 2006 00:00:00 GMT

Report by Alyssa Stewart Lee Brookings 12-18-2006

Where is the Asset Building Opportunity? A Profile of Credit Utilization and Management in 50 Metros

Wed, 20 Sep 2006 00:00:00 GMT

In this presentation at the 2006 Assets Learning Conference sponsored by CFED and the Federal Reserve, Matt Fellowes examines credit utilization and management in fifty metros. He highlights key findings and discusses the implications and next steps

Expanding the Envelope of Anti-Poverty Initiatives: State Innovations and Innovators

Tue, 18 Jul 2006 09:00:00 GMT

Event Information:

July 18, 2006, 9:00 AM to 11:00 AM

What's Ahead After The GDP's Big Surge

Fri, 31 Oct 2003 00:00:00 GMT

Opinion by George L. Perry (10/31/03)

North Carolina’s Anti-Predatory Lending Law: Still A Problem Despite New Study

Mon, 15 Sep 2003 00:00:00 GMT

Robert E. Litan reviews a study of North Carolina’s anti-predatory lending law.

The State of Minority Access to Home Mortgage Lending: A Profile of the New York Metropolitan Area

Sat, 01 Dec 2001 00:00:00 GMT

This paper illustrates that, while minority homeownership rates have increased, blacks and other minorities are often still denied mortgages at a higher rate than whites, face higher costs for credit, and are more vulnerable to foreclosure.

Homeownership That's Too Important to Risk

Mon, 20 Aug 2001 00:00:00 GMT

Opinion by Robert E. Litan, Director, Economic Studies, The Brookings Institution, in The New York Times, August 20, 2001

The Impacts of Changes in Multifamily Housing Finance on Older Urban Areas

Fri, 01 Jun 2001 00:00:00 GMT

A report examining the changes in housing finance and their affect on older urban areas

A Prudent Approach To Preventing "Predatory" Lending

Thu, 15 Feb 2001 00:00:00 GMT

Robert E. Litan examines how the proliferation of different state and local lending rules threatens to balkanize the lending market and make it very costly, and potentially impossible, for lenders to offer nationally uniform mortgage loan contracts.

Extending the American Dream

Tue, 13 Apr 1999 00:00:00 GMT

An Oped by Bruce Katz, Senior Fellow and Director, Center on Urban and Metropolitan Policy, and Nicolas Retsinas, Director, Harvard Joint Center for Housing Studies, in the Boston Globe, April 13, 1999

Towards a Targeted Homeownership Tax Credit

Fri, 01 Jan 1999 00:00:00 GMT

This paper summarizes how the current federal tax code fosters homeownership, demonstrates that current homeownership tax incentives mostly benefit those with higher incomes, and proposes a set of criteria for reviewing homeownership tax credit propo