The American Mortgage System: Crisis and Reform

Contents

C o n t e n t s Introduction 1 Marvin M. Smith and Susan M. Wachter PART I CRISIS: ORIGINS AND SOLUTIONS 1 The Secondary Market for Housing Finance in the United States: A Brief Overview 7 Ingrid Gould Ellen, John Napier Tye, and Mark A. Willis 2 Reasonable People Did Disagree: Optimism and Pessimism About the U.S. Housing Market Before the Crash 26 Kristopher S. Gerardi, Christopher L. Foote, and Paul S. Willen 3 Exploring the Determinants of High-Cost Mortgages to Homeowners in Low- and Moderate-Income Neighborhoods 60 Michael S. Barr, Jane K. Dokko, and Benjamin J. Keys 4 Implications of the Housing Market Bubble for Sustainable Homeownership 87 Paul S. Calem, Leonard Nakamura, and Susan M. Wachter 5 A Framework for Consumer Protection in Home Mortgage Lending 112 Kathleen Engel and Thomas J. Fitzpatrick, IV PART II COMMUNITY IMPACT 6 A Profile of the Mortgage Crisis in a Low- and Moderate-Income Community 137 Lynn Fisher, Lauren Lambie-Hanson, and Paul S. Willen vi Contents 7 Constructive Credit: Revisiting the Performance of Community Reinvestment Act Lending During the Subprime Crisis 159 Carolina Reid and Elizabeth Laderman 8 Navigating the Housing Downturn and Financial Crisis: Home Appreciation and Equity Accumulation Among Community Reinvestment Homeowners 187 Sarah F. Riley and Roberto G. Quercia 9 The Community Reinvestment Act: Evaluating Past Performance and Reviewing Options for Reform 209 Mark A. Willis PART III REFORMING THE FINANCIAL ARCHITECTURE 10 Information Failure and the U.S. Mortgage Crisis 243 Adam J. Levitin and Susan M. Wachter 11 The Expanding Financial Safety Net: The Dodd-Frank Act as an Exercise in Denial and Cover-Up 271 Edward J. Kane 12 A Private Lender Cooperative Model for Residential Mortgage Finance 286 Toni Dechario, Patricia C. Mosser, Joseph Tracy, James Vickery, and Joshua Wright 13 Improving U.S. Housing Finance Through Reform of Fannie Mae and Freddie Mac: A Framework for Evaluating Alternatives 305 Ingrid Gould Ellen and Mark A. Willis 14 Some Thoughts on What to Do with Fannie Mae and Freddie Mac 339 Robert Van Order 15 The Road Not Taken: Our Failure in Redoing the Financial Architecture 358 Vincent Reinhart List of Contributors 369 Index 377 Acknowledgments 391 ...