Abstract
Underwriting standards for residential mortgages (henceforth: underwriting) are now generally regarded as having been unusually lax during the mid-2000s. Underwriting then tightened up again during the financial crisis that began in 2007. The laxity of underwriting and its ensuing tightness since the mid-1990s likely contributed considerably to the unprecedented rise and subsequent fall of mortgage volumes and house prices.
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References
Demyanyk, Yuliya, and Otto Van Hemert, Forthcoming. “Understanding the Subprime Mortgage Crisis,” available at SSRN: http://ssrn.com/abstract=1020396.
Federal Reserve May 2009. “The April 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices,” Washington, DC, www.federalreserve.gov/boarddocs/SnLoanSurvey/200905.
Office of the Comptroller of the Currency June 2008. “Survey of Credit Underwriting Practices 2008,” Washington, DC, www.occ.treas.gov/cusurvey/2008UnderwritingSur-vey.pdf.
Sherlund, Shane M. 2008. “The Past, Present, and Future of Subprime Mortgages,” Finance and Economics Discussion Series No. 2008–63. Divisions of Research & Statistics and Monetary Affairs. Federal Reserve Board, Washington, DC.
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© 2016 James A. Wilcox
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Wilcox, J.A. (2016). 2009: Underwriting, Mortgage Lending, and House Prices: 1996–2008. In: Crow, R.T. (eds) The Best of Business Economics. Palgrave Macmillan, New York. https://doi.org/10.1007/978-1-137-57251-6_33
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DOI: https://doi.org/10.1007/978-1-137-57251-6_33
Publisher Name: Palgrave Macmillan, New York
Print ISBN: 978-1-349-57417-9
Online ISBN: 978-1-137-57251-6
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