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A look back: what we now know about the causes of the US mortgage crisis

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  • Dan Immergluck

Abstract

This article reviews what we know about the causes of the US mortgage crisis, almost a decade after the crisis began. The paper summarizes the key forces that led to the crisis or, in some cases, to the development of a fundamentally fragile mortgage market, whose vulnerability helped enable the crisis. While some factors, such as federal policies pre-empting state consumer protection laws, were near-term spurs to higher levels of subprime lending, others - such as the migration of lending activity from savings and loans to less regulated mortgage companies - led to the development of a mortgage market that was more risk-loving, less regulated, and more prone to cataclysmic failure.

Suggested Citation

  • Dan Immergluck, 2015. "A look back: what we now know about the causes of the US mortgage crisis," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 19(3), pages 269-285, November.
    • Handle: RePEc:taf:rjusxx:v:19:y:2015:i:3:p:269-285
    DOI: 10.1080/12265934.2015.1044460
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    References listed on IDEAS

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    1. Atif Mian & Amir Sufi, 2008. "The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis," NBER Working Papers 13936, National Bureau of Economic Research, Inc.
    2. Sumit Agarwal & Efraim Benmelech & Nittai Bergman & Amit Seru, 2012. "Did the Community Reinvestment Act (CRA) Lead to Risky Lending?," NBER Working Papers 18609, National Bureau of Economic Research, Inc.
    3. Agarwal, Sumit & Amromin, Gene & Ben-David, Itzhak & Chomsisengphet, Souphala & Evanoff, Douglas D., 2014. "Predatory lending and the subprime crisis," Journal of Financial Economics, Elsevier, vol. 113(1), pages 29-52.
    4. Bernanke, B.S., 2011. "International capital flows and the returns to safe assets in the United States 2003-2007," Financial Stability Review, Banque de France, issue 15, pages 13-26, February.
    5. Atif Mian & Amir Sufi, 2008. "Summary of \"the consequences of mortgage credit expansion\"," Proceedings 1074, Federal Reserve Bank of Chicago.
    6. Ashcraft, A. & Goldsmith-Pinkham, P. & Vickery, J., 2010. "MBS Ratings and the Mortgage Credit Boom," Other publications TiSEM aea4b6fb-eb57-49d4-a347-f, Tilburg University, School of Economics and Management.
    7. Andra C. Ghent & Rubén Hernández-Murillo & Michael T. Owyang, 2015. "Did Affordable Housing Legislation Contribute to the Subprime Securities Boom?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 43(4), pages 820-854, November.
    8. repec:aei:rpaper:26142 is not listed on IDEAS
    9. repec:aei:rpaper:26125 is not listed on IDEAS
    10. Richard K. Green & Susan M. Wachter, 2007. "The housing finance revolution," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 21-67.
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    Cited by:

    1. Michelle Norris & Michael Byrne, 2017. "Housing Market Volatility,Stability and Social Rented Housing: comparing Austria and Ireland during the global financial crisis," Working Papers 201705, Geary Institute, University College Dublin.
    2. Michelle Norris & Michael Byrne, 2016. "Social housing's role in the Irish property boom and bust," Working Papers 201615, Geary Institute, University College Dublin.
    3. Nelson, John P., 2023. "Differential “progressibility” in human know-how: A conceptual overview," Research Policy, Elsevier, vol. 52(2).
    4. Yifei Wu & Jeffrey H Dorfman, 2018. "Reducing residential mortgage default: Should policy act before or after home purchases?," PLOS ONE, Public Library of Science, vol. 13(7), pages 1-23, July.

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