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Distributional Implications of Government Guarantees in Mortgage Markets
| Content Provider | Scilit |
|---|---|
| Author | Gete, Pedro Zecchetto, Franco |
| Copyright Year | 2017 |
| Description | Journal: SSRN Electronic Journal We analyze the removal of the credit-risk guarantees provided by the government-sponsored enterprises (GSEs) in a model with agents heterogeneous in income and house price risk. We find that wealth inequality increases, driven by higher mortgage spreads and housing rents. Housing holdings become more concentrated. Foreclosures fall. The removal benefits high-income households, while hurting low- and mid-income households (renters and highly leveraged mortgagors with conforming loans). GSE reform requires compensating transfers, sufficiently high elasticity of rental supply, or linking GSE reform with the elimination of the mortgage interest deduction. |
| Related Links | https://mpra.ub.uni-muenchen.de/80643/1/MPRA_paper_80643.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=2751726 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.2751726 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2017-06-01 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Loan Guarantees |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |