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Journal of Housing Research Volume 19, 2010 - Issue 1
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Research Articles

Turmoil in the Residential Mortgage Market: A Review and Compilation of Research and Policy

Brent SmithVirginia Commonwealth University, Richmond, VA23284
Pages 65-87 | Published online: 17 Jun 2020

  • Alexander, W.P., S.D. Grimshaw, G.R. McQueen, and B.A. Slade. Some Loans are More Equal than Others: Third-Party Originations and Defaults in the Subprime Mortgage Industry. Real Estate Economics, 2002, 30:4, 667–97. Some Loans are More Equal than Others: Third-Party Originations and Defaults in the Subprime Mortgage Industry. Real Estate Economics 30 667 97
  • An, X. and R.W. Bostic. Have the Affordable Housing Goals been a Shield against Subprime? Regulatory Incentives and the Extension of Mortgage Credit. Working paper with the School of Policy, Planning, and Development Lusk Center for Real Estate University of Southern California, April 2006.
  • Avery, R.B., K.P. Brevoort, and G.B. Canner. Higher-priced Home Lending and the 2005 HMDA Data. Federal Reserve Bulletin, 2006, 84, 123–66. Higher-priced Home Lending and the 2005 HMDA Data. Federal Reserve Bulletin 84 123 66
  • Baxter, V. and M. Lauria. Residential Mortgage Foreclosure and Neighborhood Change. Housing Policy Debate, 2000, 11:3, 675–99. Residential Mortgage Foreclosure and Neighborhood Change. Housing Policy Debate 11 675 99
  • Bostic, R.W., K.C. Engel, P.A. McCoy, A. Pennington-Cross, and S.M. Wachter. State and Local Anti-Predatory Lending Laws: The Effect of Legal Enforcement Mechanisms. Journal of Economics and Business, 2007, 60:1–2, 47–66. State and Local Anti-Predatory Lending Laws: The Effect of Legal Enforcement Mechanisms. Journal of Economics and Business 60 47 66
  • Burnett, K., M. Finkel, and B. Kaul. Mortgage Lending in North Carolina after the Anti-Predatory Lending Law. Cambridge, Abt & Associates, September 14, 2004.
  • Calem, P., K. Gillen, and S.M. Wachter. The Neighborhood Distribution of Subprime Mortgage Lending. Journal of Real Estate Finance and Economics, 2004a, 29:4, 393–410. The Neighborhood Distribution of Subprime Mortgage Lending. Journal of Real Estate Finance and Economics 29 393 410
  • Calem, P., K. Gillen, and S.M. Wachter. Neighborhood Patterns of Subprime Lending: Evidence from Disparate Cities. Housing Policy Debate, 2004b, 15:3, 603–20. Neighborhood Patterns of Subprime Lending: Evidence from Disparate Cities. Housing Policy Debate 15 603 20
  • Calem, P.S., J.E. Hershaff, and S.M. Wachter. Neighborhood Patterns of Subprime Lending: Evidence from Disparate Cities. Housing Policy Debate, 2004, 15:3, 603–22. Neighborhood Patterns of Subprime Lending: Evidence from Disparate Cities. Housing Policy Debate 15 603 22
  • California Reinvestment Committee. Five Steps to Community Reinvestment Success. San Francisco, 2001.
  • Capozza, D.R. and T.A. Thomson. Optimal Stopping and Losses on Subprime Mortgages. Journal of Real Estate Finance and Economics, 2005, 30:2, 115–31. Optimal Stopping and Losses on Subprime Mortgages. Journal of Real Estate Finance and Economics 30 115 31
  • Capozza, D.R. and T.A. Thomson. Subprime Transitions: Lingering or Malingering in Default? Journal of Real Estate Finance and Economics, 2006, 33:3, 241–58. Subprime Transitions: Lingering or Malingering in Default? Journal of Real Estate Finance and Economics 33 241 58
  • Case, K.E. and R.J. Shiller. Is There a Bubble in the Housing Market? Brookings Papers on Economic Activity, 2003, 2, 299–362. Is There a Bubble in the Housing Market? Brookings Papers on Economic Activity 2 299 362
  • Center for Responsible Lending. Subprime Lending: A Net Drain on Homeownership. Issue paper number 14. Durham, NC, CRL, March 27, 2007.
  • Chinloy, P. and N. MacDonald. Subprime Lenders and Mortgage Market Completion. Journal of Real Estate Finance and Economics, 2005, 30:20, 153–65. Subprime Lenders and Mortgage Market Completion. Journal of Real Estate Finance and Economics 30 153 65
  • Chomsisengphet, S. and A. Pennington-Cross. The Evolution of the Subprime Mortgage Market. Federal Reserve Bank of St. Louis Review, 2006, 88:1, 31–56. The Evolution of the Subprime Mortgage Market. Federal Reserve Bank of St. Louis Review 88 31 56
  • Courchane, M.J., B.C. Smith, and P.M Zorn. From FHA to Subprime and Back? Paper presented at the American Real Estate Society International Conference in Istanbul, Turkey, July 5, 2008.
  • Courchane, M.J., B.J. Surette, and P.M. Zorn. Subprime Borrowers: Mortgage Transitions and Outcomes. Journal of Real Estate Finance and Economics, 2004, 29:4, 365–92. Subprime Borrowers: Mortgage Transitions and Outcomes. Journal of Real Estate Finance and Economics 29 365 92
  • Credit Suisse. Deep Dive into Subprime Mortgage Severity. Fixed Income Research Report, June 19, 2008.
  • Crews-Cutts, A. and R.A. Van Order. On the Economics of Subprime Lending. Journal of Real Estate Finance and Economics, 2005, 30:2, 167–96. On the Economics of Subprime Lending. Journal of Real Estate Finance and Economics 30 167 96
  • Dickstein, C. and H. Thomas. Subprime and Predatory Lending in Rural America: Mortgage Lending Practices that Can Trap Low-Income Rural People, Durham, NC. Center for Responsible Lending, 2006.
  • Do, A.Q. and J.D. Shilling. The Cost of Home Mortgage Credit during the 1980s. Journal of Money Credit and Banking, 1995, 27:3, 864–75. The Cost of Home Mortgage Credit during the 1980s. Journal of Money Credit and Banking 27 864 75
  • Duncan, D. The Mortgage Bankers Association testified on February 27, 2007 before the U.S. Senate Committee on Banking, Housing, & Urban Affairs. See p. 5 at: http://banking.senate.gov/files/duncan.pdf
  • Elliehausen, G. and M.E. Staten. Regulation of Subprime Mortgage Products: An Analysis of North Carolina's Predatory Lending Law. Journal of Real Estate Finance and Economics, 2004, 29:4, 411–33. Regulation of Subprime Mortgage Products: An Analysis of North Carolina's Predatory Lending Law. Journal of Real Estate Finance and Economics 29 411 33
  • Elliehausen, G., M.E. Staten and J. Steinbuks. The Effects of State Predatory Lending Laws on the Availability of Subprime Mortgage Credit. Monograph #38, Georgetown University Credit Research Center, 2006a.
  • Elliehausen, G., M.E. Staten and J. Steinbuks. The Effect of Prepayment Penalties on the Pricing of Subprime Mortgage. Working paper, George Washington University Credit Research Center, 2006b.
  • Engel, K.C. and P.A. McCoy. A Tale of Three Markets: The Law and Economics of Predatory Lending. Texas Law Review, 2002, 80:6, 1255–1381. A Tale of Three Markets: The Law and Economics of Predatory Lending. Texas Law Review 80 1255 1381
  • Ernst, K.S. Rural Borrowers More Likely to be Penalized for Refinancing Subprime Home Loans. Center for Responsible Lending, 2004.
  • Ernst, K.S. Borrowers Gain No Interest Rate Benefits from Prepayment Penalties on Subprime Mortgages. Center for Responsible Lending, 2005.
  • Ernst, K., J. Farris, and E. Stein. North Carolina's Subprime Home Loan Market After Predatory Lending Reform. Center for Responsible Lending, 2002.
  • Farris, J. and C.A. Richardson. The Geography of Subprime Mortgage Prepayment Penalty Patterns. Housing Policy Debate, 2004, 15:3, 687–714. The Geography of Subprime Mortgage Prepayment Penalty Patterns. Housing Policy Debate 15 687 714
  • Federal Deposit Insurance Corporation. Quarterly Report, 3rd, 2007.
  • Fishbein, A.J. and P. Woodall. Subprime Cities: Patterns of Geographic Disparity in Subprime Lending. Consumer Federation of America, 2005.
  • Fishbein, A.J. and P. Woodall. Exotic or Toxic? An Examination of the Non-Traditional Mortgage Market for Consumers and Lenders. Consumer Federation of America, 2006.
  • Fortowsky, E.B. and M. LaCour-Little. An Analytical Approach to Explaining the Subprime-Prime Mortgage Spread. Article presented at the Georgetown University Credit Research Center Symposium on Subprime Lending, 2002.
  • Gerardi, K., A. Shapiro, A. Hale, and P.S. Willen. Subprime Outcomes: Risky Mortgages, Homeownership Experiences, and Foreclosures. Working paper at Federal Reserve Bank of Boston, working Paper No. 07-15, 2007.
  • Goodman, A., and B.C Smith. Housing Default: Theory Works, So Does Policy. Working paper presented at the AREUEA, Midyear Meetings, in Washington, DC, June 8, 2009.
  • Gruenstein-Bocian, D., K. Ernst, and W. Li. Unfair Lending: The Effect of Race and Ethnicity on the Price of Subprime Mortgages. Center for Responsible Lending, 2006.
  • Harvey, K.D. and P.J. Nigro. Do Predatory Lending Laws Influence Mortgage Lending? An Analysis of the North Carolina Predatory Lending Law. Journal of Real Estate Finance and Economics, 2004, 29:4, 435–56. Do Predatory Lending Laws Influence Mortgage Lending? An Analysis of the North Carolina Predatory Lending Law. Journal of Real Estate Finance and Economics 29 435 56
  • Harvey, K.D. How Do Predatory Lending Laws Influence Mortgage Lending in Urban Areas? A Tale of Two Cities. Journal of Real Estate Research, 2003, 25:4, 479–508. How Do Predatory Lending Laws Influence Mortgage Lending in Urban Areas? A Tale of Two Cities. Journal of Real Estate Research 25 479 508
  • Home Ownership and Equity Protection Act of 1994 (HOEPA). Pub. L. 103-325, 108 Stat. 21600.
  • Ho, G. and A. Pennington-Cross. The Impact of Local Predatory Lending Laws On The Flow of Subprime Credit. Working paper at the Federal Reserve Bank of St. Louis, 2005-049B, 2005.
  • Ho, G. and A. Pennington-Cross. The Impact of Local Predatory Lending Laws on the Flow of Subprime Credit. Journal of Urban Economics, 2006a, 60:2, 210–28. The Impact of Local Predatory Lending Laws on the Flow of Subprime Credit. Journal of Urban Economics 60 210 28
  • Ho, G. and A. Pennington-Cross. States Fight Predatory Lending Laws in Different Ways. Report prepared for the Federal Reserve Bank of St. Louis, January, 2006b.
  • Hynes, R. and E.A. Posner. The Law and Economics of Consumer Finance. American Law and Economics Review, 2002, 4:2, 168–207. The Law and Economics of Consumer Finance. American Law and Economics Review 4 168 207
  • Immergluck, D., and G. Smith. Measuring the Effect of Subprime Lending on Neighborhood Foreclosures: Evidence from Chicago. Urban Affairs Review, 2005, 40:3, 362–89. Measuring the Effect of Subprime Lending on Neighborhood Foreclosures: Evidence from Chicago. Urban Affairs Review 40 362 89
  • Immergluck, D. and M. Wiles. Two Steps Back: The Dual Mortgage Market, Predatory Lending and the Undoing of Community Development. The Woodstock Institute, 1999.
  • Inside B&C Lending. Lenders Will Try to Pin Down Effects of NC Mortgage Law. March 5, 2001.
  • Jackson, H.E. and J. Berry. Kickbacks or Compensation: The Case of Yield Spread Premiums. Working paper, 2002, available at: http://www.law.harvard.edu/faculty/hjackson/pdfs/januarydraft.pdf
  • Kim-Sung, K.K. and S. Hermanson. Experiences of Older Refinance Mortgage Loan Borrowers and Lender Originated Loans. AARP Public Policy Institute, 2003.
  • Lax, H., M. Manti, P. Raca, and P. Zorn. Subprime Lending: An Investigation of Economic Efficiency. Housing Policy Debate, 2004, 15:3, 533–71. Subprime Lending: An Investigation of Economic Efficiency. Housing Policy Debate 15 533 71
  • Lesser-Mansfield, C. The Road to Subprime "HEL" was Paved with Good Congressional Intentions: Usury Deregulation and the Subprime Home Equity Market. South Carolina Law Review, 2000, 51, 473–594. The Road to Subprime "HEL" was Paved with Good Congressional Intentions: Usury Deregulation and the Subprime Home Equity Market. South Carolina Law Review 51 473 594
  • Li, W. and K. Ernst. The Best Value in the Subprime Market. Center for Responsible Lending, 2006.
  • Mortgage Bankers Association. Delinquencies and Foreclosures Increase in Latest MBA National Delinquency Survey. Press Release, September 5, 2008,a.
  • Mortgage Bankers Association. Delinquencies and Foreclosures Increase in Latest MBA National Delinquency Survey. Press Release, March 6, 2008,b.
  • Moody's Investor Service. Moody's Subprime Mortgage Servicer Survey on Loan Modifications. Research report, September 21, 2007,a.
  • Moody's Investor Service. Update to Moody's Approach to Analyzing Delinquent Loans Included in Performing U.S. RMBS. Research report, August 21, 2007,b.
  • Morgan Stanley. Channel Check: Surprisingly Strong Subprime Growth. Diversified Financials August 1, 2002.
  • National Association of Home Builders. Housing Industry Data, 2007, at: http://www.nahb.org/generic.aspx?genericContentID_45409
  • Nichols, J., A. Pennington-Cross, and A. Yezer. Borrower Self-Selection, Underwriting Costs, and Subprime Mortgage Credit Supply. Journal of Real Estate Finance and Economics, 2005, 30:20, 197–219. Borrower Self-Selection, Underwriting Costs, and Subprime Mortgage Credit Supply. Journal of Real Estate Finance and Economics 30 197 219
  • Office of the Comptroller of Currency (OCC). See Survey of Credit Underwriting Practices 2005 p. 5, Office of the Comptroller of the Currency, National Credit Committee, 2005.
  • Pennington-Cross, A. Subprime Lending in the Primary and Secondary Markets. Journal of Housing Research, 2002, 13:1, 31–50. Subprime Lending in the Primary and Secondary Markets. Journal of Housing Research 13 31 50
  • Pennington-Cross, A. Credit History and the Performance of Prime and Nonprime Mortgages. Journal of Real Estate Finance and Economics, 2003, 27:3, 279–301. Credit History and the Performance of Prime and Nonprime Mortgages. Journal of Real Estate Finance and Economics 27 279 301
  • Pennington-Cross, A. The Value of Foreclosed Property. Journal of Real Estate Research, 2006, 28:2, 193– 214. The Value of Foreclosed Property. Journal of Real Estate Research 28 193 214
  • Pennington-Cross, A. and S. Chomsisengphet. Subprime Refinancing: Equity Extraction and Mortgage Termination. Real Estate Economics, 2007, 35:2, 233–63. Subprime Refinancing: Equity Extraction and Mortgage Termination. Real Estate Economics 35 233 63
  • Pennington-Cross, A. and G. Ho. Predatory Lending Laws and the Cost of Credit. Real Estate Economics, 2008, 36:2, 175–211. Predatory Lending Laws and the Cost of Credit. Real Estate Economics 36 175 211
  • Quercia, R.G., M.A. Stegman, and W.R. Davis. Assessing the Impact of North Carolina's Predatory Lending Law. Housing Policy Debate, 2004, 15:3, 573–601. Assessing the Impact of North Carolina's Predatory Lending Law Housing Policy Debate 15 573 601
  • Quercia, R.G., M.A. Stegman, and W.R. Davis. The Impact of Predatory Loan Terms on Subprime Foreclosures: The Special Case of Prepayment Penalties and Balloon Payments. Center for Community Capitalism, Kenan Institute for Private Enterprise University of North Carolina at Chapel Hill, January 25, 2005.
  • Reich, J. Subprime and Predatory Lending. Statement before the Committee on Financial Services, 2007, at: http://www.house.gov/apps/list/hearing/financialsvcsdem/htreich032807.pdf
  • Renuart, E. An Overview of the Predatory Mortgage Lending Process. Housing Policy Debate, 2004, 15:3, 467–502. An Overview of the Predatory Mortgage Lending Process. Housing Policy Debate 15 467 502
  • Rose, M.J. Predatory Lending Practices and Subprime Foreclosures—Distinguishing Impacts by Loan Category. Working Paper at the Office of the Comptroller of the Currency, December, 2006.
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  • Schloemer, E., W. Li, K. Ernst, and K. Keest. Losing Ground: Foreclosures in the Subprime Market and their Cost to Homeowners. Center for Responsible Lending, December, 2006.
  • S&P Case-Shiller Home Price Index. 2008.
  • Smith, B. Competition and Risk factors in the Mortgage Lending: The Federal Housing Administration's Evolving Role in the Primary Market, Working paper, 2009.
  • Smith, G. Mortgage Pricing Data Sheds Light on Subprime Market. Woodstock Institute, 2005.
  • Temkin, K., J.E.H. Johnson, and D. Levy. Subprime Markets, the Role of GSEs and Risk-Based Pricing. U.S. Department of Housing and Urban Development, Office of Policy Development and Research, March, 2002.
  • U.S. Department of Housing and Urban Development. Unequal Burden: Income and Racial Disparities in Subprime Lending in America. Department of Housing and Urban Development, 2000.
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