Reports & Publications

Interventions in Mortgage Default: Policies and Practices to Prevent Home Loss and Lower Costs [PDF 882K]

Subprime mortgage defaults have been the focus of attention in recent months, and while the default problem in the prime segment of the market is much less severe, the issues around how to keep borrowers in their homes affect all market segments. In particular, what do we know about defaults and what causes them? Is there an ideal cost-benefit timeframe for the foreclosure process? What are the costs associated with foreclosure? Cutts and Merrill find that the foreclosure process varies widely across states and that the costs associated with foreclosure rise significantly with the length of the foreclosure timeline while the likelihood a borrower successfully cures out of the delinquency falls.

Revisting the Net Benefits of Freddie Mac and Fannie Mae [PDF 283K]

James Miller and James Pearce update their 2001 GSE cost/benefit estimates to reflect research during the interim and the recent growth in mortgage markets. They now find that, on net, Freddie Mac and Fannie Mae confer even greater benefits to homeowners and the economy than previously stated.

Homeward Bound: An In-Depth Look at Asian Homebuyers in the United States [PDF 424K]

Asians represent the second fastest growing minority population in the United States. Although many of these immigrant households will become homeowners in the coming decades, very little is known about this growing market. To gain a better understanding of the cultural norms and expectations of Asian first-time homebuyers, Freddie Mac conducted focus groups involving Chinese, Korean, Vietnamese, Asian Indian, Filipino, and American-born Asian consumers and real estate professionals. Although the study revealed many differences among ethnicities, this report highlights recurring themes across groups that may lead to a greater understanding of the needs and expectations of Asian consumers.

Revision Bias in Repeat-Sales Home Price Indices [PDF 1.1M]

Repeat-sales home-price indices are widely used measures of changes in home values. These indices use repeated valuations of the same properties over time to gauge the average change in home prices and suffer from "revision volatility," a tendency of previously estimated values for prior quarters to change with a new release. We examine the sources of the revision volatility and reject a theoretical correction in favor of a methodological fix that was adopted on the basis of this research in both the Conventional Mortgage Home Price Index and the OFHEO House Price Index, the two most widely cited repeat-sales indices.

Reversion to the Mean Versus Sticking to the Fundamentals: Looking to the Next Five Years for Housing Price Growth [PDF 332K]

The keen interest of the media, and by extension, the public, in the future of house price growth in the United States centers on the question of whether home prices are ready for a fall or merely for a slowing in growth rates. We examine these potential outcomes by forecasting the likely change in prices under four models. In all cases, we find the predicted worst-case outcomes to be much less dire than the "doomsday" predictions reported in the mainstream press and elsewhere.

The Housing Landscape for America's Working Families 2005 [PDF 2.6M]

This study shows that when it comes to decent, affordable housing for working families, the landscape is changing, but not for the better. The number of America's working families spending more than half their income on housing grew 76 percent in just over half a decade. In addition, six out of 10 immigrant working families with critical housing needs are Hispanic and one-third are from Mexico. Freddie Mac funded the study.

Does Mortgage Hedging Raise Long-Term Interest Rate Volatility? [PDF 352K]

An examination of the possible role of mortgage hedging in creating volatility in interest rate markets.

Innovative Servicing Technology: Smart Enough to Keep People in Their Houses? [PDF 608K]

This research examines recent innovations in mortgage servicing and their impacts on foreclosure incidence and loss mitigation. These innovations are shown to reduce costs and help keep more delinquent borrowers in their homes, regardless of borrower income.

America's Home Forecast: The Next Decade for Housing and Mortgage Finance [PDF 1.3M]

This report authored by Chief Economist Frank Nothaft and four other leading housing and mortgage finance economists predicts a strong growth in the nation's housing sector over the coming decade.

The Contribution of Home Value Appreciation to US Economic Growth [PDF 187K]

This article reviews the effect of home equity wealth accumulation upon consumer expenditures, the beneficial economic role played by the mortgage market in enabling families to tap their home equity and convert it into cash, and surveys recent home value trends while addressing the likelihood of a fall in these values.

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