The Great American Housing Bubble
What Went Wrong and How We Can Protect Ourselves in the Future
Seiten
2020
Harvard University Press (Verlag)
9780674979659 (ISBN)
Harvard University Press (Verlag)
9780674979659 (ISBN)
Adam Levitin and Susan Wachter argue that the housing bubble of the 2000s was caused by private-label securitization. Competition among Wall Street banks set off a race to the bottom in mortgage underwriting that inflated home prices but yielded huge profits before the bubble burst. To avoid déjà vu, w¬e need carefully regulated securitization.
The definitive account of the housing bubble that caused the Great Recession—and earned Wall Street fantastic profits.
The American housing bubble of the 2000s caused the worst global financial crisis since the Great Depression. In this definitive account, Adam Levitin and Susan Wachter pinpoint its source: the shift in mortgage financing from securitization by Fannie Mae and Freddie Mac to “private-label securitization” by Wall Street banks. This change set off a race to the bottom in mortgage underwriting standards, as banks competed in laxity to gain market share.
The Great American Housing Bubble tells the story of the transformation of mortgage lending from a dysfunctional, local affair, featuring short-term, interest-only “bullet” loans, to a robust, national market based around the thirty-year fixed-rate mortgage, a uniquely American innovation that served as the foundation for the middle class.
Levitin and Wachter show how Fannie and Freddie’s market power kept risk in check until 2003, when mortgage financing shifted sharply to private-label securitization, as lenders looked for a way to sustain lending volume following an unprecedented refinancing wave. Private-label securitization brought a return of bullet loans, which had lower initial payments—enabling borrowers to borrow more—but much greater back-loaded risks. These loans produced a vast oversupply of underpriced mortgage finance that drove up home prices unsustainably. When the bubble burst, it set off a destructive downward spiral of home prices and foreclosures.
Levitin and Wachter propose a rebuild of the housing finance system that ensures the widespread availability of the thirty-year fixed-rate mortgage, while preventing underwriting competition and shifting risk away from the public to private investors.
The definitive account of the housing bubble that caused the Great Recession—and earned Wall Street fantastic profits.
The American housing bubble of the 2000s caused the worst global financial crisis since the Great Depression. In this definitive account, Adam Levitin and Susan Wachter pinpoint its source: the shift in mortgage financing from securitization by Fannie Mae and Freddie Mac to “private-label securitization” by Wall Street banks. This change set off a race to the bottom in mortgage underwriting standards, as banks competed in laxity to gain market share.
The Great American Housing Bubble tells the story of the transformation of mortgage lending from a dysfunctional, local affair, featuring short-term, interest-only “bullet” loans, to a robust, national market based around the thirty-year fixed-rate mortgage, a uniquely American innovation that served as the foundation for the middle class.
Levitin and Wachter show how Fannie and Freddie’s market power kept risk in check until 2003, when mortgage financing shifted sharply to private-label securitization, as lenders looked for a way to sustain lending volume following an unprecedented refinancing wave. Private-label securitization brought a return of bullet loans, which had lower initial payments—enabling borrowers to borrow more—but much greater back-loaded risks. These loans produced a vast oversupply of underpriced mortgage finance that drove up home prices unsustainably. When the bubble burst, it set off a destructive downward spiral of home prices and foreclosures.
Levitin and Wachter propose a rebuild of the housing finance system that ensures the widespread availability of the thirty-year fixed-rate mortgage, while preventing underwriting competition and shifting risk away from the public to private investors.
Adam J. Levitin is Agnes N. Williams Research Professor and Professor of Law at Georgetown University Law Center. He spearheaded the Congressional Oversight Panel’s foreclosure prevention efforts during the financial crisis. Susan M. Wachter is Albert Sussman Professor of Real Estate and Professor of Finance at The Wharton School of the University of Pennsylvania. She is codirector of the Penn Institute for Urban Research and was an assistant secretary of HUD.
| Erscheinungsdatum | 01.07.2020 |
|---|---|
| Zusatzinfo | 64 illus., 5 tables |
| Verlagsort | Cambridge, Mass |
| Sprache | englisch |
| Maße | 156 x 235 mm |
| Gewicht | 762 g |
| Themenwelt | Sachbuch/Ratgeber ► Beruf / Finanzen / Recht / Wirtschaft ► Wirtschaft |
| Geschichte ► Teilgebiete der Geschichte ► Wirtschaftsgeschichte | |
| Sozialwissenschaften ► Politik / Verwaltung ► Politische Theorie | |
| ISBN-13 | 9780674979659 / 9780674979659 |
| Zustand | Neuware |
| Informationen gemäß Produktsicherheitsverordnung (GPSR) | |
| Haben Sie eine Frage zum Produkt? |
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Buch | Hardcover (2025)
C.H.Beck (Verlag)
CHF 39,20
