# Discussion of Credit Growth and the Financial Crisis: A New Narrative, by Albanesi et al.

Save this PDF as:

Size: px
Start display at page:

Download "Discussion of Credit Growth and the Financial Crisis: A New Narrative, by Albanesi et al."

## Transcription

1 Discussion of Credit Growth and the Financial Crisis: A New Narrative, by Albanesi et al. Atif Mian Princeton University and NBER March 4, / 24

2 Main result high credit growth attributed to low credit score individuals captures life cycle demand for borrowing, as well as life cycle affects in the evolution of credit scores. Contrast with Mian and Sufi (2015a), Household debt and defaults from 2000 to 2010: Facts from credit bureau data. 2 / 24

3 Replicating Figure 1 (b): Sort by 1999 Credit Score 3 / 24

4 Replicating Figure 1 (a) : Sort by 8Q-lagged Credit Score 4 / 24

5 Replication Differences Replication using Mian and Sufi (2015a) data is qualitatively similar One data difference: MS15a data is limited to zip codes for which Case-Shiller zip code level house price index existed. (essentially urban areas) One important methodological difference MS15a data follows the same set of individuals over time. New entrants into credit bureau are not included. Hence credit growth is computed over the same set of individuals. The authors are not looking at credit growth of the same set of individuals over time. The credit balance of new entrants in any credit score quartile, should not be compared with individuals in the same quartile in previous period. This is especially problematic for lower quartile bins as new entrants may start with low total credit and lower score on average. 5 / 24

6 Comment # 1: Proper way to compute score-specific credit growth Define, y it = total \$ borrowing of individual i in period t. Sort individuals by their base period (t = 0) credit score bin q 0, and define, Y qt = i q 0 y it Then credit-score-bin-specific credit growth from t j to t can be computed as: CG qt = jy qt Y qt j (1) The methodology avoids the issue of dividing by zeros or very small numbers 10.38% of individual observations have zero total debt 6 / 24

7 Is CG qt spuriously correlated with life-cycle trends? The authors argue yes. They argue that CG qt is correlated with age in the data, and that controlling for age changes the ranking of CG qt by q0. Comment # 2: MS15a did test for this issue: Yes, age is correlated with initial credit score. But within the same age-cohort shows the same qualitative pattern 7 / 24

8 Comment #2: MS15a age-score correlation 8 / 24

9 Comment #2: MS15a within age-cohort robustness 9 / 24

10 Comment # 3: Comparing CG qt within the same age-year bin I compute CG aqt for each age-year cohort separately. We can test for differential credit growth across credit-score bins by regressing: CG aqt = Q (β qt I q ) + ɛ aqt (2) q=1 We can control (almost) non-parametrically for age by regressing: CG aqt = Q 99 (β qt I q ) + (β at I a ) + ɛ aqt (3) q=1 a=19 All regressions are value(\$)-weighted, results same if we weigh by number of individuals in each observation. 10 / 24

11 Comment # 3: Unadjusted 11 / 24

12 Comment # 3: Age-adjusted 12 / 24

13 Comment # 4: One should not over control using age While controlling for age does not change the main message. There are good reasons not to control for age. Age is also correlated with behavioral traits. e.g. Agarwal, Driscoll, Gabaix and Laibson (2009): young and very old make more financial mistakes, with 53 as age of reason Mian and Sufi (2011): Young homeowners more responsive to credit expansion through housing collateral channel. Under Fed s Reg. B (Equal Credit Opportunity), a credit-scoring model can use age (as long as empirically based ), but cannot use prohibited information including race, ethnicity, national origin, religion, sex, and marital status. [See: Report to Congress On Credit Scoring, Fed BoG] 13 / 24

14 Comment # 4: One should not over control using age Suppose the true equation is, Y i = α + β 1 X 1i + β 2 X 2i + ɛ i (4) where X 1i is inverse of individual i s credit score, X 2i is a life cycle variable, β 1 > 0, and β 2 > 0. We do not observe X 2i, but are concerned that it might be positively correlated with X 1i biasing ˆβ 1 upwards. We use a proxy for X 2i, X 2i, which is also correlated with X 1i, Plugging (5) in (4), we end up regressing, X 2i = π 1 X 1i + π 2 X 2i (5) π 1 Y i = α + (β 1 β 2 )X 1i + β 2 X 2i + ɛ i (6) π 2 ˆβ 1 is biased downwards due to over-controlling. π 2 14 / 24

15 Comment # 5: Dynamic Credit Score Sort Is Problematic The authors argue that MS15a choice of sorting by q 0 is misleading because initial credit scores naturally evolve for life-cycle reasons. They argue we should hence sort on t minus 8 quarter credit score. I have already shown that the premise of this logic is not correct: We observe the same credit growth pattern even when fully adjusting for potential age-cohort effects. Nonetheless there are additional (serious) problems with dynamically sorting on credit scores If people entering lower credit score bins are either new entrants, or have recently defaulted, their credit growth would be naturally slower. If credit growth is (partly) driven by lax lending standards, change in credit score is endogenous. (e.g. ever-greening of consumer loans while house prices continue to go up) 15 / 24

16 Comment # 5: Dynamic Credit Score Sort Is Problematic While the level of credit score in 2006 is negatively correlated with the likelihood of default in subsequent years, change in credit score during the credit boom positively predicts default! Ideally, the current credit score should be a sufficient statistic for predicting default. Clearly not the case for the Great Recession period. Dynamically sorting on credit scores is problematic! We had already mentioned this point in MS15a 16 / 24

17 Comment # 5: Dynamic Sort Effect. Dependent variable: Default in year X? (0/100) (1) (2) (3) (4) (5) (Credit Score) (0.061) (0.068) (0.069) (0.068) (0.070) (Credit Score) (Credit Score) (Credit Score) (Credit Score) (Credit Score) (0.079) (0.084) (0.083) 2.28 (0.12) 3.65 (0.13) 4.77 (0.13) 5.72 (0.13) Constant (0.53) (0.58) (0.58) (0.58) (0.59) R Observations / 24

18 Comment # 5: Conditioning on no default in 2006 The dynamic sort effect is even more pronouned now! Dependent variable: Default in year X? (0/100) (1) (2) (3) (4) (5) (Credit Score) (0.070) (0.077) (0.080) (0.080) (0.082) (Credit Score) (Credit Score) (Credit Score) (Credit Score) (Credit Score) (0.073) (0.080) (0.081) 2.14 (0.11) 3.61 (0.12) 5.51 (0.12) 6.94 (0.12) Constant (0.62) (0.66) (0.69) (0.69) (0.71) R Observations / 24

19 Comment # 5: Partial Plot Credit Score 19 / 24

20 Comment # 5: Partial Plot Credit Score Change 20 / 24

21 Comment # 6: HELOCS vs Mortgage Refinancing 21 / 24

22 Comment # 7: Misunderstanding of prior work Example: First paragraph A broadly accepted narrative about the financial crisis is based on the findings in Mian and Sufi (2009) and Mian and Sufi (2015a) suggesting that most of the growth in credit during the boom was concentrated in the subprime segment and most of the new defaults during the crisis were also concentrated in this segment. 22 / 24

23 Comment # 7: Misunderstanding of prior work MS2009 was about marginal homebuyer, not overall credit. The scope of MS2009 was limited to new home purchase loans, and 65% of households already owned a home. Mian and Sufi (2011) shows the quantitative importance of broad-based credit growth through the increase in leverage of existing homeowners. For the macro channel, credit score / income correlation with credit growth is not necessarily relevant. What matters is that lending and borrowing households are different in terms of their discount rate, or MPC. (e.g. Eggertsson and Krugman (QJE 2012), Korinek and Simsek (AER forthcoming)) 23 / 24

24 Summary of Comments 1. Credit growth should be properly computed without composition effects 2. MS15a had shown the age-score correlation & robustness 3. Credit growth pattern is robust to fully saturated age controls 4. One should be careful not to over control using age 5. Dynamic credit sort is problematic 6. Helocs vs mortgage refinancing 7. Misunderstanding of prior work 24 / 24

### Comment On: Reducing Foreclosures by Christopher Foote, Kristopher Gerardi, Lorenz Goette and Paul Willen

Comment On: Reducing Foreclosures by Christopher Foote, Kristopher Gerardi, Lorenz Goette and Paul Willen Atif Mian 1 University of Chicago Booth School of Business and NBER The current global recession

### Household debt and consumption in the UK. Evidence from UK microdata. 10 March 2015

Household debt and consumption in the UK Evidence from UK microdata 10 March 2015 Disclaimer This presentation does not necessarily represent the views of the Bank of England or members of the Monetary

### Market Structure, Credit Expansion and Mortgage Default Risk

Market Structure, Credit Expansion and Mortgage Default Risk By Liu, Shilling, and Sing Discussion by David Ling Primary Research Questions 1. Is concentration in the banking industry within a state associated

### "Cash on Hand" and Consumption: Evidence from Mortgage Refinancing [PRELIMINARY AND INCOMPLETE] Atif Mian Princeton University and NBER

"Cash on Hand" and Consumption: Evidence from Mortgage Refinancing [PRELIMINARY AND INCOMPLETE] Atif Mian Princeton University and NBER Amir Sufi University of Chicago Booth School of Business and NBER

### Fraudulent Income Overstatement by Home Buyers During the Mortgage Credit Expansion of 2002 to 2005

Fraudulent Income Overstatement by Home Buyers During the Mortgage Credit Expansion of 2002 to 2005 Atif Mian Princeton University NBER Amir Sufi University of Chicago Booth School of Business NBER Mian

### Household debt and spending in the United Kingdom

Household debt and spending in the United Kingdom Phil Bunn and May Rostom Bank of England Norges Bank Workshop: 24 March 2015 1 Outline Motivation Literature/theory Data/methodology Econometric results

Comments on Collateral Valuation Lawrence J. White Stern School of Business New York University Lwhite@stern.nyu.edu Presentation at FTC, November 16, 2012 1 Overview The problem/issue What they did What

### 1 Determinants of small business default

Els UK Ch01-H8158 RMV 13-8-2007 5:59p.m. Page:1 Trim:165 234MM Float: Top/Bot T.S: Integra, India 1 Determinants of small business default Sumit Agarwal, Souphala Chomsisengphet and Chunlin Liu Abstract

### The Role of Homebuyers Price Expectations in Mortgage Leverage Choice

The Role of Homebuyers Price Expectations in Mortgage Leverage Choice Josh Morris-Levenson 1 During the last decade, a boom and bust in the US housing market contributed to a financial crisis and severe

### Discussion. Credit Boom and Lending Standard: Evidence from Subprime Mortgage Lending. Satyajit Chatterjee

Credit Boom and Lending Standard: Evidence from Subprime Mortgage Lending Research Department Federal Reserve Bank of Philadelphia September 2008 OBJECTIVES AND FINDINGS Consensus that the source of the

### FRBSF ECONOMIC LETTER

FRBSF ECONOMIC LETTER 2012-25 August 20, 2012 Consumer Debt and the Economic Recovery BY JOHN KRAINER A key ingredient of an economic recovery is a pickup in household spending supported by increased consumer

### Household Finance. Household Finance, JF August 2006

Household Finance Household Finance, JF August 2006 Down or Out: Assessing the Welfare Costs of Household Investment Mistakes, with Laurent Calvet and Paolo Sodini, JPE October 2007 Fight or Flight? Rebalancing

### House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis*

House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis* Atif Mian University of Chicago Booth School of Business and NBER Amir Sufi University of Chicago Booth School of Business

### House Price Gains and U.S. Household Spending from 2002 to 2006

House Price Gains and U.S. Household Spending from 2002 to 2006 Atif Mian Princeton University and NBER Amir Sufi University of Chicago Booth School of Business and NBER May 2014 Abstract We examine the

### Returning to the Nest: Debt and Parental Co-residence Among Young Adults

Returning to the Nest: Debt and Parental Co-residence Among Young Adults L I S A J. D E T T L I N G ( F E D E R A L R E S E R V E B O A R D ) J O A N N E W. H S U ( F E D E R A L R E S E R V E B O A R

### Cream-skimming in Subprime Mortgage Securitizations: January, Which Subprime 5 2011 Mortgage 1 / 16 Lo

Cream-skimming in Subprime Mortgage Securitizations: Which Subprime Mortgage Loans were Sold by Depository Institutions Prior to the Crisis of 2007? Paul Calem, Christopher Henderson, Jonathan Liles Discussion

### Credit Spending And Its Implications for Recent U.S. Economic Growth

Credit Spending And Its Implications for Recent U.S. Economic Growth Meghan Bishop, Mary Washington College Since the early 1990's, the United States has experienced the longest economic expansion in recorded

### Small Bank Comparative Advantages in Alleviating Financial Constraints and Providing Liquidity Insurance over Time

Small Bank Comparative Advantages in Alleviating Financial Constraints and Providing Liquidity Insurance over Time Allen N. Berger University of South Carolina Wharton Financial Institutions Center European

### Student Loan Borrowing and Repayment Trends, 2015

Student Loan Borrowing and Repayment Trends, 2015 April 16, 2015 Andrew Haughwout, Donghoon Lee, Joelle Scally, Wilbert van der Klaauw The views presented here are those of the authors and do not necessarily

### Do Banks Pass through Credit Expansions? The Marginal Protability of Consumer Lending During the Great Recession

Do Banks Pass through Credit Expansions? The Marginal Protability of Consumer Lending During the Great Recession Summit Agarwal, Souphala Chomsisengphet, Neale Mahoney, and Johannes Stroebel Comments by

### An Analysis of Default Risk in the Home Equity Conversion Mortgage (HECM) Program

An Analysis of Default Risk in the Home Equity Conversion Mortgage (HECM) Program Stephanie Moulton, John Glenn School of Public Affairs, The Ohio State University Donald Haurin, Department of Economics,

Understanding Your Credit Score Prof. Michael Staten Director, Take Charge America Institute Norton School of Family and Consumer Sciences FEFE Conference, Baltimore, MD April 30, 2010 A Good Credit Score

### Subprime Mortgage Defaults and Credit Default Swaps

Subprime Mortgage Defaults and Credit Default Swaps The Journal of Finance Eric Arentsen (TCW) David C. Mauer (IOWA) Brian Rosenlund (TCW) Harold H. Zhang (UTD) Feng Zhao (UTD) Motivation The sharp increase

### Adverse Selection in the Credit Card Market: Evidence from Randomized Trials of Credit Card Solicitations. Abstract

Adverse Selection in the Credit Card Market: Evidence from Randomized Trials of Credit Card Solicitations Sumit Agarwal a, Souphala Chomsisengphet b, and Chunlin Liu c Abstract Using unique data from multiple

### 6/5/2013. Predicting Student Loan Delinquency and Default. Outline. Introduction - Motivation (1) Reuben Ford CASFAA Conference, Ottawa June 10, 2013

Predicting Student Loan Delinquency and Default Reuben Ford CASFAA Conference, Ottawa June 10, 2013 Outline Introduction: Motivation and Research Questions Literature Review Methodology Selected Descriptive

### INSIGHT on the Issues

INSIGHT on the Issues AARP Public Policy Institute A First Look at Older Americans and the Mortgage Crisis This first-ever analysis of data on the mortgage crisis by age shows a surprisingly significant

### How Did the US Housing Slump Begin? Role of the 2005 Bankruptcy Reform 1. This version: April 19 2011. Abstract

How Did the US Housing Slump Begin? Role of the 2005 Bankruptcy Reform 1 Ulf von Lilienfeld-Toal 2 and Dilip Mookherjee 3 This version: April 19 2011 Abstract Most analyses of the recent Great Recession

### The Liquidity Trap and U.S. Interest Rates in the 1930s

The Liquidity Trap and U.S. Interest Rates in the 1930s SHORT SUMMARY Christopher Hanes Department of Economics School of Business University of Mississippi University, MS 38677 (662) 915-5829 chanes@bus.olemiss.edu

### Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.

Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C. How Much Are Car Purchases Driven by Home Equity Withdrawal? Evidence

Page 1 of 5 - The Big Picture - http://www.ritholtz.com/blog - Housing Market Headwinds Posted By Guest Author On November 10, 2014 @ 5:00 am In Real Estate,Think Tank 3 Comments Housing Market Headwinds

### Online Appendix for. House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis American Economic Review. Atif Mian Amir Sufi

Online Appendix for House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis American Economic Review Appendix Figure 1 Atif Mian Amir Sufi Appendix Figure 1 graphs house price

### CHANGES IN BUYER COMPOSITION AND THE EXPANSION OF CREDIT DURING THE BOOM 1. Manuel Adelino, Duke. Antoinette Schoar, MIT and NBER

CHANGES IN BUYER COMPOSITION AND THE EXPANSION OF CREDIT DURING THE BOOM 1 Manuel Adelino, Duke Antoinette Schoar, MIT and NBER Felipe Severino, Dartmouth Current version: March, 2015 First version: November,

### Econ 330 Exam 1 Name ID Section Number

Econ 330 Exam 1 Name ID Section Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If during the past decade the average rate of monetary growth

### Fair Lending Update. 2012 Banker Outreach Program

Fair Lending Update 2012 Banker Outreach Program Fair Lending Discussion Topics: Fair Lending High Risks Areas Pricing and Underwriting Examination Focus and Procedures How to Conduct a Comparative Analysis

### ZMdesk. ZM Unified Total Prepayment Model VERSION UPDATE JANUARY 2015. Practical Solutions to Complex Financial Problems

ZMdesk VERSION UPDATE JANUARY 2015 ZM Unified Total Prepayment Model Practical Solutions to Complex Financial Problems ZM Financial System s Unified Total Prepayment Model (ZMUTP) INTRODUCTION ZM Financial

### Guide to Fair Mortgage Lending and Home Preservation

Guide to Fair Mortgage Lending and Home Preservation Fair Housing Legal Support Center & Clinic Guide to Fair Mortgage Lending and Home Preservation What does this guide cover? What is Fair Lending? What

### The U.S. Housing Crisis and the Risk of Recession. 1. Recent Developments in the U.S. Housing Market Falling Housing Prices

Economic Spotlight ALBERTA FINANCE Budget and Fiscal Planning March 4, 2008 The U.S. Housing Crisis and the Risk of Recession Summary The worsening U.S. housing slump is spreading to the broader economy

### A systemic approach to home loans: Continuous workouts vs. fixed rate contracts (Shiller et al., 2014)

A systemic approach to home loans: Continuous workouts vs. fixed rate contracts (Shiller et al., 2014) Discussion Cristian Badarinza EFA Meeting, Lugano, August 2014 Summary 1. Unexpected house price declines

### Chapter 10 6/16/2010. Mortgage Types and Borrower Decisions: Overview Role of the secondary market. Mortgage types:

Mortgage Types and Borrower Decisions: Overview Role of the secondary market Chapter 10 Residential Mortgage Types and Borrower Decisions Mortgage types: Conventional mortgages FHA mortgages VA mortgages

### Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.

Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C. How House Price Dynamics and Credit Constraints affect the Equity

### On the Effect of Student Loans on Access to Homeownership Alvaro Mezza Shane Sherlund Kamila Sommer

On the Effect of Student Loans on Access to Homeownership Alvaro Mezza Shane Sherlund Kamila Sommer December 2014 Disclaimer The views expressed herein are those of the individual authors and do not necessarily

### I will turn now to how well this characterization captures the actual situation.

The U.S. Household Debt Overhang Karen Dynan October 25, 2012 Thank you for inviting me to speak today. I would like to start by commending the organizers for putting together this conference. The past

### Integrated Household Surveys and Corporate Financial Accounting: Lessons from Thailand

Integrated Household Surveys and Corporate Financial Accounting: Lessons from Thailand Robert M. Townsend Elizabeth & James Killian Professor of Economics, MIT Research Associate, University of Chicago

### Home-Mortgage Lending Trends in New England in 2010

January 212 No. 212-1 Home-Mortgage Lending Trends in New England in 21 Ana Patricia Muñoz The views expressed in this paper are solely those of the author and do not necessarily represent those of the

### THE CONSEQUENCES OF MORTGAGE CREDIT EXPANSION: EVIDENCE FROM THE U.S. MORTGAGE DEFAULT CRISIS * ATIF MIAN and AMIR SUFI

THE CONSEQUENCES OF MORTGAGE CREDIT EXPANSION: EVIDENCE FROM THE U.S. MORTGAGE DEFAULT CRISIS * ATIF MIAN and AMIR SUFI Abstract We conduct a within-county analysis using detailed zip code level data to

### Response to Critiques of Mortgage Discrimination and FHA Loan Performance

A Response to Comments Response to Critiques of Mortgage Discrimination and FHA Loan Performance James A. Berkovec Glenn B. Canner Stuart A. Gabriel Timothy H. Hannan Abstract This response discusses the

### Business Cycles and Divorce: Evidence from Microdata *

Business Cycles and Divorce: Evidence from Microdata * Judith K. Hellerstein 1 Melinda Sandler Morrill 2 Ben Zou 3 We use individual-level data to show that divorce is pro-cyclical on average, a finding

### The Effect of Housing on Portfolio Choice. July 2009

The Effect of Housing on Portfolio Choice Raj Chetty Harvard Univ. Adam Szeidl UC-Berkeley July 2009 Introduction How does homeownership affect financial portfolios? Linkages between housing and financial

### FRBSF ECONOMIC LETTER

FRBSF ECONOMIC LETTER 21-1 January 6, 21 Drivers of Mortgage Choices by Risky Borrowers BY FRED FURLONG, DAVID LANG, AND YELENA TAKHTAMANOVA During the past decade s housing boom, borrowers with lower

### Vol 2012, No. 6. Abstract

Housing equity withdrawal in Ireland: Reamonn Lydon & Niall O Hanlon (CSO) Economic Letter Series Vol, No. Abstract At the peak of the Irish property boom in the mids, housing equity withdrawal by existing

### } With relatively stable

Did Home Equity Restrictions Help Keep Mortgages from Going Underwater? By Anil Kumar and Edward C. Skelton } With relatively stable house prices in, the incidence of underwater mortgages was a fraction

### The Age of Reason: Financial Decisions Over the Lifecycle

The Age of Reason: Financial Decisions Over the Lifecycle Sumit Agarwal, John C. Driscoll, Xavier Gabaix, and David Laibson Current Version: March 19, 2007 Abstract The sophistication of financial decisions

### Refinancing, Profitability, and Capital Structure

Refinancing, Profitability, and Capital Structure András Danis Daniel Rettl Toni M. Whited October, 2013 The Broad Question We want to test the tradeoff theory of capital structure. Old and elusive goal.

### Credit Scoring and Its Role In Lending A Guide for the Mortgage Professional

Credit Scoring and Its Role In Lending A Guide for the Mortgage Professional How To Improve an Applicant's Credit Score There is no magic to improving an applicant's credit score. Credit scores automatically

### Discussion of "Short-Term Interest Rates and Bank Lending Terms" (Dell Ariccia, Laeven, and Suárez)

Discussion of "Short-Term Interest Rates and Bank Lending Terms" (Dell Ariccia, Laeven, and Suárez) Borja Larrain November 2015 1 Summary Very interesting paper. Broad question: Role of banks in the transmission

### The Relationship between Second Liens, First Mortgage Outcomes, and Borrower Credit: 1996 2010

FHFA WORKING PAPERS Working Paper 14 3 The Relationship between Second Liens, First Mortgage Outcomes, and Borrower Credit: 1996 2010 Andrew Leventis Office of Policy Analysis and Research Federal Housing

### POSITION PAPER RIDING THE CYCLES. Understanding business, financial and monetary cycles in order to allocate fixed income

POSITION PAPER RIDING THE CYCLES Understanding business, financial and monetary cycles in order to allocate fixed income TABLE OF CONTENTS EXECUTIVE SUMMARY 2 CYCLES ARE KEY TO BOND TOTAL RETURNS 3 THREE

### The default rate leapt up because:

The financial crisis What led up to the crisis? Short-term interest rates were very low, starting as a policy by the federal reserve, and stayed low in 2000-2005 partly due to policy, partly to expanding

### Data Appendix for Firm Age, Investment Opportunities, and Job Creation

Data Appendix for Firm Age, Investment Opportunities, and Job Creation Manuel Adelino Fuqua School of Business Duke University Song Ma Fuqua School of Business Duke University September 21, 2015 David

### How Do Small Businesses Finance their Growth Opportunities? The Case of Recovery from the Lost Decade in Japan

How Do Small Businesses Finance their Growth Opportunities? The Case of Recovery from the Lost Decade in Japan Daisuke Tsuruta National Graduate Institute for Policy Studies and CRD Association January

### The 2009 Consumer Financial Literacy Survey Final Report. The National Foundation for Credit Counseling

The 2009 Consumer Financial Literacy Survey Final Report Prepared For: The National Foundation for Credit Counseling Prepared By: Harris Interactive Inc. Public Relations Research Summary At this time

### The FHA Does Not Produce Sustainable Homeownership

The FHA Does Not Produce Sustainable Homeownership Government Involvement in Residential Mortgage Markets Sponsored by: the Federal Reserve Bank of Atlanta Edward Pinto, Resident Fellow American Enterprise

### An Approach to Stress Testing the Canadian Mortgage Portfolio

Financial System Review December 2007 An Approach to Stress Testing the Canadian Mortgage Portfolio Moez Souissi I n Canada, residential mortgage loans account for close to 47 per cent of the total loan

### Characteristics of Home Mortgage Lending to Racial or Ethnic Groups in Iowa

Characteristics of Home Mortgage Lending to Racial or Ethnic Groups in Iowa Liesl Eathington Dave Swenson Regional Capacity Analysis Program ReCAP Department of Economics, Iowa State University September

### Understanding the NEW DISCLOSURES FOR THE ALLOWANCE FOR CREDIT LOSSES

Understanding the NEW DISCLOSURES FOR THE ALLOWANCE FOR CREDIT LOSSES Executive Summary & Recommendations This document refers to the recent changes in disclosure requirements for financing receivables

### Lender Expectations and Mortgage Market Dynamics: A Panel Data Study

Lender Expectations and Mortgage Market Dynamics: A Panel Data Study Natalie Tiernan October 2013 PRELIMINARY AND INCOMPLETE Abstract I create a new Metropolitan Statistical Area (MSA) level database to

### Consumer Over-indebtedness and Financial Vulnerability: Evidence from Credit Bureau Data

KDI International Conference on Household Debt from an International Perspective: Issues and Policy Directions Consumer Over-indebtedness and Financial Vulnerability: Evidence from Credit Bureau Data By

March 31, 2005 FREQUENTLY ASKED QUESTIONS ABOUT THE NEW HMDA DATA General Background 1. What is the Home Mortgage Disclosure Act (HMDA)? HMDA, enacted by Congress in 1975, requires most mortgage lenders

### First-Time Homebuyers: The Role of Thin Credit Files

Preliminary Not for redistribution First-Time Homebuyers: The Role of Thin Credit Files Joseph Gyourko 1 Donghoon Lee 2 Joseph Tracy 2 June 2015 Abstract We investigate the performance of FHA first-time

### Credit Scores: The gateway to credit and how the scoring landscape is changing

Credit Scores: The gateway to credit and how the scoring landscape is changing Barrett Burns President and CEO July 17, 2014 Today, Consumers can receive many scores VantageScore Newest model introduced

### Credit Risk Models. August 24 26, 2010

Credit Risk Models August 24 26, 2010 AGENDA 1 st Case Study : Credit Rating Model Borrowers and Factoring (Accounts Receivable Financing) pages 3 10 2 nd Case Study : Credit Scoring Model Automobile Leasing

### Comparing Loan Performance Between Races as a Test for Discrimination

Comparing Loan Performance Between Races as a Test for Discrimination George Galster The Urban Institute Abstract This critique argues that analysis of loan performance data cannot provide a clear indicator

### SMR Research Corporation Stuart A. Feldstein, President

Mortgage Refinance And Home Equity Loan Propensity Scores Identifying Who's Most Likely To Get A New Loan In The Next Three Months SMR Research Corporation Stuart A. Feldstein, President 300 Valentine

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Survey of Macroeconomics, MBA 641 Fall 2006, Quiz 4 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The central bank for the United States

### The Importance of Adverse Selection in the Credit Card Market: Evidence from Randomized Trials of Credit Card Solicitations

SUMIT AGARWAL SOUPHALA CHOMSISENGPHET CHUNLIN LIU The Importance of Adverse Selection in the Credit Card Market: Evidence from Randomized Trials of Credit Card Solicitations Analyzing unique data from

### Working Paper Series

Human Capital and Economic Opportunity Global Working Group Working Paper Series Working Paper No. 2014-006 Patrick Bayer Fernando Ferreira Stephen L. Ross March, 2014 Human Capital and Economic Opportunity

### Forced Asset Sales and the Concentration of Outstanding Debt: Evidence from the Mortgage Market

Forced Asset Sales and the Concentration of Outstanding Debt: Evidence from the Mortgage Market Giovanni Favara Federal Reserve Board Mariassunta Giannetti Stockholm School of Economics, CEPR & ECGI The

### Testimony On. State of the American Dream: Economy Policy and the Future of the Middle Class COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

Testimony On State of the American Dream: Economy Policy and the Future of the Middle Class COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS SUBCOMMITTEE ON ECONOMIC POLICY Thursday, June 6 th, 2013 Atif

### Regulating Consumer Financial Products: Evidence from Credit Cards

Regulating Consumer Financial Products: Evidence from Credit Cards Sumit Agarwal, NUS Souphala Chomsisengphet, OCC Neale Mahoney, Chicago Booth and NBER Johannes Stroebel, NYU Stern Economics of Payments

### Art or Science? Modeling and Challenges in the Post-Financial Crisis Economy

Art or Science? Modeling and Challenges in the Post-Financial Crisis Economy Emre Sahingur, Ph.D. Chief Risk Officer for Model Risk Fannie Mae May 2015 2011 Fannie Mae. Trademarks of Fannie Mae. 2015 Fannie

### Quarterly Credit Conditions Survey Report

Quarterly Credit Conditions Report Contents List of Figures & Tables... 2 Background... 3 Overview... 4 Personal Lending... 7 Micro Business Lending... 10 Small Business Lending... 12 Medium-Sized Business

### The Obama Administration s Efforts To Stabilize The Housing Market and Help American Homeowners

The Obama Administration s Efforts To Stabilize The Housing Market and Help American Homeowners July 2014 U.S. Department of Housing and Urban Development Office of Policy Development and Research U.S

### What Did Lenders Know? House Price Increases and Previously Rejected Mortgages

What Did Lenders Know? House Price Increases and Previously Rejected Mortgages Peggy Crawford Pepperdine University Joetta Forsyth Pepperdine University We examine whether the incidence of originated mortgages

### NFMC Client Level Data and Quarterly Reporting Requirements

NFMC Client Level Data and Quarterly Reporting Requirements The following data points will be collected for each draw request. If, upon implementation of the National Foreclosure Mitigation Counseling

### Flaws in the Use of Loan Defaults To Test for Mortgage Lending Discrimination

Flaws in the Use of Loan Defaults To Test for Mortgage Lending Discrimination Flaws in the Use of Loan Defaults To Test for Mortgage Lending Discrimination Stephen L. Ross University of Connecticut Abstract

### Are unconventional monetary policies bad for banks?

Frederic Lambert International Monetary Fund 1 The potential side-effects of unconventional monetary policies have received more and more attention as short-term interest rates in many advanced economies

### Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence

Optimal Consumption with Stochastic Income: Deviations from Certainty Equivalence Zeldes, QJE 1989 Background (Not in Paper) Income Uncertainty dates back to even earlier years, with the seminal work of

### WORKING PAPER NO. 11-13 CREDIT CYCLE AND ADVERSE SELECTION EFFECTS IN CONSUMER CREDIT MARKETS EVIDENCE FROM THE HELOC MARKET

WORKING PAPER NO. 11-13 CREDIT CYCLE AND ADVERSE SELECTION EFFECTS IN CONSUMER CREDIT MARKETS EVIDENCE FROM THE HELOC MARKET Paul Calem Board of Governors of the Federal Reserve System Matthew Cannon CoreLogic

### Federal Reserve Bank of New York Staff Reports. Follow the Money: Quantifying Domestic Effects of Foreign Bank Shocks in the Great Recession

Federal Reserve Bank of New York Staff Reports Follow the Money: Quantifying Domestic Effects of Foreign Bank Shocks in the Great Recession Nicola Cetorelli Linda S. Goldberg Staff Report no. 545 February

### = C + I + G + NX ECON 302. Lecture 4: Aggregate Expenditures/Keynesian Model: Equilibrium in the Goods Market/Loanable Funds Market

Intermediate Macroeconomics Lecture 4: Introduction to the Goods Market Review of the Aggregate Expenditures model and the Keynesian Cross ECON 302 Professor Yamin Ahmad Components of Aggregate Demand

### IW Monetary Outlook December 2015

IW policy paper 37/2015 Contributions to the political debate by the Cologne Institute for Economic Research IW Monetary Outlook December 2015 Weak Credit Growth Hinders Eurozone Inflation to Increase

### Guide to Guarantor Loans

Guide to Guarantor Loans Guide to Guarantor loans Although most people often failed to understand the attraction of payday loans, they did demonstrate a vacuum in the UK as a solution for people with poor

### Americans Debt Styles by Age and over Time

H O U S I N G F I N A N C E P O L I C Y C E N T E R RE S E A RCH RE P O R T Americans Debt Styles by Age and over Time Wei Li November 15 Laurie Goodman AB O U T THE URBA N I N S T I T U TE The nonprofit

### Estimating Effects of Adjustable Mortgage Rate Resets

Estimating Effects of Adjustable Mortgage Rate Resets Sergey P. Trudolyubov Strategic Analytics Inc., Santa Fe, NM 87505, USA strudolyubov@strategicanalytics.com Joseph L. Breeden Strategic Analytics Inc.,

### Recent Developments in Small Business Finance

April 1 Recent Developments in Small Business Finance Introduction In 1, a Small Business Panel was formed by the Reserve Bank to advise it on the availability of finance to small business. At about the

### Determinants of Non Performing Loans: Case of US Banking Sector

141 Determinants of Non Performing Loans: Case of US Banking Sector Irum Saba 1 Rehana Kouser 2 Muhammad Azeem 3 Non Performing Loan Rate is the most important issue for banks to survive. There are lots

### House Price Shocks and Household Savings: evidence from Dutch administrative data

House Price Shocks and Household Savings: evidence from Dutch administrative data Nancy van Beers 1, Michiel Bijlsma 2, Remco Mocking 3,4 - Abstract- We study the effect of house price shocks on the savings