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Impacts of Down Payment Underwriting Standards on Loan Performance

Author

Listed:
  • Ken Lam

    (Federal Housing Finance Agency)

  • Robert Dunsky

    (Federal Housing Finance Agency)

  • Austin Kelly

    (Federal Housing Finance Agency)

Abstract

Policy discussions are increasingly focused on a return to more conservative mortgage underwriting standards. This study explores the relationship between down payment (loan-to-value ratio or LTV) requirements and loan performance of GSE and FHA mortgages, controlling for borrower characteristics and housing market conditions.

Suggested Citation

  • Ken Lam & Robert Dunsky & Austin Kelly, 2013. "Impacts of Down Payment Underwriting Standards on Loan Performance," FHFA Staff Working Papers 13-03, Federal Housing Finance Agency.
    • Handle: RePEc:hfa:wpaper:13-03
    as

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    References listed on IDEAS

    as
    1. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-138, February.
    2. Yuliya Demyanyk & Otto Van Hemert, 2011. "Understanding the Subprime Mortgage Crisis," The Review of Financial Studies, Society for Financial Studies, vol. 24(6), pages 1848-1880.
    3. Austin Kelly, 2007. "Zero Down Payment Mortgage Default," FHFA Staff Working Papers 07-05, Federal Housing Finance Agency.
    4. Deng, Yongheng & Quigley, John M. & Van Order, Robert & Mac, Freddie, 1996. "Mortgage default and low downpayment loans: The costs of public subsidy," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 263-285, June.
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    Cited by:

    1. Stephen D. Oliner & Morris A. Davis & Will Larson, 2019. "Mortgage risk since 1990," AEI Economics Working Papers 1001502, American Enterprise Institute.
    2. Ravn, Søren Hove, 2016. "Endogenous credit standards and aggregate fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 69(C), pages 89-111.
    3. Alexander N. Bogin & William M. Doerner & William D. Larson, 2016. "Missing the Mark: House Price Index Accuracy and Mortgage Credit Modeling," Working Papers 2016-010, The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting.
    4. Christopher L. Foote & Paul S. Willen, 2018. "Mortgage-Default Research and the Recent Foreclosure Crisis," Annual Review of Financial Economics, Annual Reviews, vol. 10(1), pages 59-100, November.
    5. Fout, Hamilton & Li, Grace & Palim, Mark & Pan, Ying, 2020. "Credit risk of low income mortgages," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    6. Saty Patrabansh, 2015. "The Marginal Effect of First-Time Homebuyer Status on Mortgage Default and Prepayment," FHFA Staff Working Papers 15-02, Federal Housing Finance Agency.
    7. James A Kahn & Benjamin S Kay, 2020. "The impact of credit risk mispricing on mortgage lending during the subprime boom," BIS Working Papers 875, Bank for International Settlements.
    8. James A. Kahn & Benjamin S. Kay, 2019. "The Impact of Credit Risk Mispricing on Mortgage Lending during the Subprime Boom," Finance and Economics Discussion Series 2019-046, Board of Governors of the Federal Reserve System (U.S.).

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