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The Anatomy of a Residential Mortgage Crisis: A Look Back to the 1930s

Kenneth Snowden ()

No 16244, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Looking back to the 1930s provides the opportunity to examine one severe mortgage crisis as we live through another. This paper examines the development of the residential mortgage market during the 1920s, the institutional disruptions that occurred in the 1930s and the policy response of federal and state governments. The crisis reshaped the structure and development of the residential mortgage market and led to a postwar system in which portfolio lenders dominated both local and interregional markets. Some pre-1930 innovations--mortgage insurance and high-leverage, affordable loans--were written into federal programs and became part of the new system. But early experiments and proposals for securitization did not survive the 1930s and the implementation of this innovation was delayed for forty years.

JEL-codes: E32 G01 G18 G21 N1 N12 N62 R51 (search for similar items in EconPapers)
Date: 2010-07
Note: CF DAE
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Published as "The Anatomy Of A Residential Mortgage Crisis: A Look Back To The 1930s", in L. Mitchell (ed.) The Panic of 2008: Causes, Consequences and Proposals for Reform.

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