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Local Economic Risk Factors On The Primary And Secondary Mortgage Markets, Brent W. Ambrose, Anthony Pennington-Cross
Local Economic Risk Factors On The Primary And Secondary Mortgage Markets, Brent W. Ambrose, Anthony Pennington-Cross
Finance Faculty Research and Publications
This paper presents a cross-sectional analysis of the spatial distribution of loans in the primary and secondary mortgage markets. Aggregating loan originations to the MSA level, we examine the proportion of the market served by FHA and conventional lenders. We model the geographic differences in market shares as a function of supply, demand, and economic risk factors. Results indicate that FHA market shares are higher in cities with higher economic risk characteristics. To examine the role of GSE activity, we model the spatial distribution of the disposition of conventional loans. Again, we focus on the impact of local economic risk …
The Federal Housing Administration In The New Millennium, Anthony Pennington-Cross, Anthony Yezer
The Federal Housing Administration In The New Millennium, Anthony Pennington-Cross, Anthony Yezer
Finance Faculty Research and Publications
The first challenge in attempting to predict the future of the Federal Housing Administration (FHA) is to understand why it is still here. No other depression-era mortgage-market institution has survived without substantial modification. We conclude that its survival has depended on its ability to invent new purposes for itself. For example, it changed from a replacement for failed private mortgage insurance using economic soundness as an insurance criterion to an innovator in high-risk lending based on an acceptable risk criterion. FHA has developed special programs to serve the needs of specific groups. We believe this pattern of change in purposes …