Sunday, May 9, 2010

Belsky and Wachter on The Public Interest in Consumer and Mortgage Credit Markets

Eric S. Belsky (Harvard--Joint Center for Housing Studies & Graduate School of Urban Design) and Susan M. Wachter (Penn--Wharton, Real Estate) have posted The Public Interest in Consumer and Mortgage Credit Markets.  The abstract:

This paper examines mortgage credit markets and the need for government intervention to protect and advance the public interest. We identify as rationales for the public interest: positive and negative externalities, the promotion of equal access, and information asymmetry and principal agent problems. We point to the role of market conduct and structure, as well as information asymmetry and principal agent problems, as prominent sources for the US mortgage debacle. While it is beyond the scope of this paper to outline a reform program, this paper points, in the aftermath of the crisis, to a need for a framework to address information and principal agent issues in the conduct and structure of mortgage markets. As a new framework for mortgage markets is developed, attention needs to be placed on the role that information on loan quality and pricing plays for borrowers’ and investors’ appropriate pricing and allocation of capital.

Matt Festa

http://lawprofessors.typepad.com/land_use/2010/05/belskyand-wachter-on-the-public-interest-in-consumer-and-mortgage-credit-markets.html

Finance, Financial Crisis, Mortgage Crisis, Mortgages, Real Estate Transactions, Scholarship | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0133ed6d052e970b

Listed below are links to weblogs that reference Belsky and Wachter on The Public Interest in Consumer and Mortgage Credit Markets:

Comments

Post a comment