Publications

  • Research Area: Housing Finance ×
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  • Mortgage Lending to Vulnerable Communities: A Closer Look at HMDA 2009

    Across the U.S., the number of home purchase mortgages issued to low- and moderate-income borrowers jumped by 26 percent in 2009, even as overall home purchase lending declined, new research released by the Furman Center finds. The data brief, Mortgage Lending to Vulnerable Communities: A Closer Look at HMDA 2009, finds that lending to low- and moderate-income homebuyers increased nationwide in 2009, despite a reduction in the number of home purchase mortgages issued to higher income borrowers. Lending in low- and moderate-income neighborhoods, on the other hand, did not see a similar increase.

  • The Role of Neighborhood Characteristics in Mortgage Default Risk: Evidence from New York City

    We construct a database of non-prime hybrid adjustable and fixed rate mortgages from New York City that augments a rich set of loan and borrower risk characteristics with a variety of census tract level neighborhood characteristics. We find that these neighborhood characteristics are important for default behavior, even after an extensive set of controls. First, default rates increase with the rate of foreclosure notices and the number of lender-owned properties (REOs) in the tract. Second, default rates for home purchase mortgages are higher in predominantly black tracts, regardless of the borrower’s own race. We explore possible explanations for our findings.

  • Rental Housing Policy in the United States

    In this volume of the U.S. Department of Housing and Urban Development’s policy development and research journal, Cityscape, guest editors Vicki Been and Ingrid Gould Ellen bring together seven innovative proposals from leading housing researchers calling for changes in government policies to benefit renters and their communities. This collection of articles propose reforms, such as the elimination of the mortgage interest deduction, which could serve as viable alternatives to traditional federal rental programs.  These perspectives offer U.S. policymakers ways to potentially adapt international housing assistance models to reform the domestic housing market.

  • The American Mortgage System: Crisis and Reform

    The Secondary Mortgage Market for Housing Finance in the United States: A Brief Overview

    Understanding both the current problems in the secondary market and the proposed solutions requires an understanding of the role of the secondary mortgage market in U.S. housing finance. In this chapter, the authors focus in particular on the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, which for decades were the largest players in the U.S. system. The authors conclude that while the described weaknesses within the chapter are important, and the structure of the GSE’s should surely be improved, it would be a mistake to assume that simply reforming the GSEs, without making significant reforms to the private-label market, would prevent another crisis.


    The Community Reinvestment Act: Evaluating Past Performance and Reviewing Options for Reform

    The passage of the Community Reinvestment Act (CRA) in 1977 set in motion a bold experiment that has yet to achieve its full potential. This chapter analyzes the strengths and weaknesses of implementation of the CRA over the last 33 years and provides potential directions for reform, one of which recommends that the Obama administration designate one agency to take the lead and give the agency a tight timetable, sufficient staffing and analytic resources, and the authority to resolve disputes. While reform may also involve legislation, it is important to make sure that it does not become overly prescriptive and stifle innovation. The banking world will continue to evolve, as will the best ideas on how to revitalize and strengthen communities.


    Improving U.S. Housing Finance Through Reform of Fannie Mae and Freddie Mac: A Framework for Evaluating Alternatives

    This chapter lays out criteria for evaluating proposals for reform of Fannie Mae and Freddie Mac. The authors introduce the basic goals of a healthy secondary market for both the single-family and multi-family markets, which include access to liquid credit markets nationwide, countercyclical stability and availability of safe products that are reasonably priced and clearly understood by borrowers and investors.The authors also offer a framework that will help describe and understand the different proposals for reform and how variants of Fannie and Freddie might fit into that picture. As federal government officials contemplate the future of these two entities, the authors hope that this chapter offers a useful framework to use in evaluating the alternative proposals.

  • New York Quarterly Housing Update 2011: 1st Quarter

    In an analysis of first quarter housing indicators, the Furman Center finds that housing prices declined between the last quarter of 2010 and the first quarter of 2011 in every borough except Queens, where prices remained essentially flat. The volume of home sales continued to decline in every borough compared to the previous year. The Quarterly Housing Update is unique among New York City housing reports because it incorporates sales data, new construction indicators, and foreclosures. It also presents a repeat sales index for each borough to capture price appreciation while controlling for housing quality.

  • Foreclosure and Kids: Does Losing Your Home Mean Losing Your School?

    The second in a two-part series on the effects of the foreclosure crisis on children, this report addresses the relationship between foreclosure and student mobility. New York University’s Institute for Education and Social Policy (IESP) and Furman Center for Real Estate and Urban Policy find that New York City public school students living in buildings entering foreclosure are more likely to switch schools than their peers, less likely to leave the school system, and that their new schools tend to be lower performing than the ones they left.

  • Does City-Subsidized Owner-Occupied Housing Improve School Quality? Evidence from New York City

    Policymakers have long promoted homeownership as a mechanism for community change. While previous studies have shown a positive association between homeownership and education at the individual level, ours is the first to systematically report on the effect of subsidized, owner-occupied housing on local schools. This New York City-focused analysis suggests that investments in subsidized, owner-occupied housing are associated with an increase in standardized reading and math scores at local schools, whereas similar investments in rental housing are not associated with any improvement in school quality.  Subsidized, owner-occupied housing has also changed the demographic characteristics of local schools in New York City, increasing the percentage of white students and decreasing the percentage eligible for free lunch.

  • Does Losing Your Home Mean Losing Your School?:  Effects of Foreclosures on the School Mobility of Children

    In the last few years, millions of homes around the country have entered foreclosure, pushing many families out of their homes and potentially forcing their children to move to new schools. Unfortunately, despite considerable attention to the causes and consequences of mortgage defaults, we understand little about the distribution and severity of these impacts on school children. This paper takes a step toward filling that gap through studying how foreclosures in New York City affect the mobility of public school children across schools. A significant body of research suggests that, in general, switching schools is costly for students, though the magnitude of the effect depends critically on the nature of the move and the quality of the origin and destination schools.

  • Decoding the Foreclosure Crisis: Causes, Responses and Consequences

    In a Point/Counterpoint exchange, Furman Center researchers discuss the causes and consequences of the foreclosure crisis. Each of the Point/Counterpoint teams was asked to address a set of questions covering the scope and causes of the foreclosure crisis, whether the federal policy response was appropriate, and how the future of mortgage lending may change in response to the crisis.

  • The Evolving Crisis in Context: Recent Developments for Tenants in the Foreclosure Crisis

    Although the plight of renters in the foreclosure crisis has entered the consciousness of national policymakers, renters have more often than not been omitted from the narratives offered to describe the ongoing crisis. Despite the lack of attention they have received, many thousands of rent-paying tenants have also been affected by the foreclosure crisis. Fortunately, tenants have received specific protections from mortgage giants Fannie Mae and Freddie Mac as well as new rights under new federal laws. But while these new protections and rights should help, tenants still face significant uncertainty as the foreclosure crisis continues to unfold and outreach and communication of these rights will be essential. This chapter, assesses the extent and scale of the challenges facing renters in the foreclosure crisis, as well federal action and GSE policy changes designed to address their rights. It is an excerpt from a report by The National Center for Suburban Studies at Hofstra University, “Forging a New Housing Policy: Opportunity in the Wake of Crisis.”