Browsing by Author "Reher, Michael"

Now showing 1 - 3 of 3
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    Mortgage Securitization and Shadow Bank Lending
    (Oxford University Press, 2021-05) Gete, Pedro; Reher, Michael; Goldstein, Itay; https://ror.org/02jjdwm75
    We show how securitization affects the size of the nonbank lending sector through a novel price-based channel. We identify the channel using a regulatory spillover shock to the cross-section of mortgage-backed security prices: the U.S. liquidity coverage ratio. The shock increases secondary market prices for FHA-insured loans by granting them favorable regulatory status once securitized. Higher prices lower nonbanks’ funding costs, prompting them to loosen lending standards and originate more FHA-insured loans. This channel accounts for 22% of nonbanks’ growth in overall mortgage market share over 2013–2015. While the shock creates risks for financial stability, homeownership also increases.
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    Mortgage Supply and Housing Rents
    (Oxford University Press, 2018-12) Gete, Pedro; Reher, Michael; Ministerio de Economía y Competitividad; https://ror.org/02jjdwm75
    We show that a contraction of mortgage supply after the Great Recession has increased housing rents. Our empirical strategy exploits heterogeneity in MSAs’ exposure to regulatory shocks experienced by lenders over the 2010–2014 period. Tighter lending standards have increased demand for rental housing, leading to higher rents, depressed homeownership rates and an increase in rental supply. Absent the credit supply contraction, annual rent growth would have been 2.1 percentage points lower over 2010–2014 in MSAs in which lending standards rose from their 2008 levels. Received December 21, 2016; editorial decision October 24, 2017 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.
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    Two Extensive Margins of Credit and Loan-to-Value Policies
    (Wiley, 2016-09-15) Gete, Pedro; Reher, Michael; Real Estate Research Institute ; Ministerio de Economía y Competitividad; https://ror.org/02jjdwm75
    We analyze a model of mortgage markets, housing tenure choice, heterogeneous agents, and default with closed form solutions. We uncover new insights which may inspire empirical work, and we ground already established insights in a series of tractable expressions. Then we study optimal loan-to-value (LTV) regulation and show that the choice of an LTV cap should balance the opposing forces of access to homeownership and the negative externalities associated with default. Homeownership affordability concerns induce procyclical elements into optimal regulation which attenuate the countercyclical regulation justified by the negative default externalities.