UNDERSTANDING MORTGAGE MELTDOWNS -- UNDERSTANDING MORTGAGE MELTDOWNS -- CONTENTS -- PREFACE -- EXAMINING THE CAUSES OF THE CREDIT CRISIS OF 2008, MINORITY STAFF ANALYSIS, U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM -- EXECUTIVE SUMMARY -- The Role of Fannie Mae and Freddie Mac in Creating the Credit Crisis -- Lehman Brothers, AIG and the Challenges of Statistical Risk Modeling -- Regulation and the Credit Crisis -- Credit Rating Agencies and the Practice of "Rating Shopping" -- MORTGAGE MARKETS: A PRIMER -- THE ROLE OF FANNIE MAE AND FREDDIE MAC IN CREATING THE CREDIT CRISIS -- ENTER LEHMAN BROTHERS AND COUNTRYWIDE -- THE CHALLENGES OF STATISTICAL MODELING FOR RISK ASSESSMENT -- CREDIT RATING AGENCIES AND THE PRACTICE OF "RATING SHOPPING" -- REGULATION AND THE CREDIT CRISIS -- REFERENCES -- ALTERNATIVE MORTGAGES: CAUSES AND POLICY IMPLICATIONS OF TROUBLED MORTGAGE RESETS IN THE SUBPRIME AND ALT-A MARKETS* -- ABSTRACT -- BACKGROUND -- EVENTS THAT LED TO UNSUSTAINABLE MORTGAGES -- Size and Timing of the Upcoming Mortgage Resets -- Credit Quality of Resetting Loans Appears Weak -- FEATURES OF NONTRADITIONAL MORTGAGES -- Adjustable Rates -- Extremely Low or Zero Down Payment -- Interest Only -- Negative Amortization -- FEDERAL AGENCY ACTIONS ON ALTERNATIVE MORTGAGES -- Financial Regulatory Institution Guidance -- October 2006 Inter-Agency Guidance -- Issues and Comments -- Consumer Disclosure -- Prudent Practices -- FEDERAL RESERVE REVISION OF REGULATION Z -- Consumer Protection Hearings -- Final Rule for Regulation Z -- FHA's Hope for Homeowners Program -- ANALYSIS OF NONTRADITIONAL MORTGAGES -- Payment Resets, Affordability Products, and Planned Refinances -- Reasons for the Resets: Booming House Prices and the Attraction of Alternative Mortgages -- Negative Appreciation: Consequences for Resets.

Interest Rate Risk -- Geographic Correlation of Falling-House-Price Risk and Interest Rate Risk -- Recent Price Declines -- CONCLUSION -- REFERENCES -- ECONOMIC ANALYSIS OF A MORTGAGE FORECLOSURE MORATORIUM -- ABSTRACT -- BACKGROUND -- ECONOMIC ANALYSIS OF DELAYING FORECLOSURE -- THE ECONOMICS OF EXCESS INVENTORIES IN THE HOUSING MARKET -- Supply and Demand -- Attitude of Developers toward Prior Home Purchasers -- Nominal Mortgage Contracts, Inflation,and Sticky House Prices -- Foreclosures and Unmanageable Resets Increase Supply -- Fence-Sitters, Potential Buyers May Wait for Prices to Bottom out -- Financial Problems of Banks and GSEs Reduce Demand for Houses -- UNCERTAINTY AFFECTING HOUSING MARKET PARTICIPANTS -- Loan Servicers -- Borrowers -- Lenders -- FORECLOSURE MORATORIUMS IN HISTORICAL PERSPECTIVE -- Great Depression -- Efforts to Stabilize Markets by Preventing Price Declines -- Economic Analysis of Depression-Era Mortgage Moratoriums -- Criticism of the Depression Analogy -- Natural Disasters -- Other Examples -- REFERENCES -- UNDERSTANDING MORTGAGE FORECLOSURE: RECENT EVENTS, THE PROCESS, AND COSTS -- ABSTRACT -- INTRODUCTION -- THE RECENT FORECLOSURE EXPERIENCE -- THE GENERAL FORECLOSURE PROCESS -- A Traditional Lending Framework -- A Structured Financing Framework -- ESTIMATES OF FORECLOSURE COSTS -- COULD NATIONAL FORECLOSURE LAWS REDUCE COSTS? -- REFERENCES -- CONSTITUTIONAL ISSUES RELATING TO PROPOSALS FOR LEGISLATION TO IMPOSE AN INTEREST RATE FREEZE/REDUCTION ON EXISTING MORTGAGES -- ABSTRACT -- INTRODUCTION AND BACKGROUND -- LEGISLATIVE AUTHORITY TO PASS AN INTEREST RATE FREEZE/REDUCTION -- CONTRACT CLAUSE AND SUBSTANTIVE DUE PROCESS -- OVERVIEW OF TAKINGS CLAUSE JURISPRUDENCE -- Four Types of Takings -- Physical Taking/Appropriation vs. Regulatory Taking -- Historical Precedent: Vinton Branch and Radford.

APPLICATION OF PENN CENTRAL TO AN INTEREST RATE FREEZE/REDUCTION -- Penn Central Overview -- Economic Impact -- Impairment of Investment-Backed Expectations -- Character of the Government Action -- CONCLUSION -- REFERENCES -- SUBPRIME MORTGAGES: PRIMER ON CURRENT LENDING AND FORECLOSURE ISSUES -- ABSTRACT -- BACKGROUND -- THE SUBPRIME MARKET AND ALTERNATIVE MORTGAGES -- GROWTH, FORECLOSURES, AND RISK IN SUBPRIME MORTGAGES -- STRESS ON SUBPRIME LENDERS -- BANKING AGENCY GUIDANCE -- POLICY CONSIDERATIONS -- REFERENCES -- GOVERNMENT INTERVENTIONS IN FINANCIAL MARKETS: ECONOMIC AND HISTORIC ANALYSIS OF SUBPRIME MORTGAGE OPTIONS -- ABSTRACT -- INTRODUCTION -- POLICY ISSUES -- A BRIEF OVERVIEW OF SUBPRIME DELINQUENCY AND DEFAULT -- THE NATURE OF THE SUBPRIME RESET PROBLEM -- SELECTED PREVIOUS GOVERNMENT INTERVENTIONS -- Home Owners' Loan Corporation -- Contemporary Issues -- Results -- Application to Subprime Mortgage Restructuring -- Continental Illinois -- Contemporary Issues -- Results -- Application to Subprime Mortgage Restructuring -- Savings and Loans -- Contemporary Issues -- Results -- Application to Subprime Mortgage Restructuring -- Brady Bonds -- Contemporary Issues -- Results -- Application to Subprime Mortgage Restructuring -- CONCLUSION -- REFERENCES -- PROPOSAL TO ALLOW TREASURY TO BUY MORTGAGE-RELATED ASSETS TO ADDRESS FINANCIAL INSTABILITY -- ABSTRACT -- THE DRAFT PROPOSALS -- Purchase of Mortgage-Related Assets -- Debt Limit -- Definition of Troubled Asset -- Authority to Take Action -- Restrictions -- Factors to Guide Intervention -- Management of Mortgage-Related Assets -- Loss Mitigation and Loan Modification -- Sunset -- Reports to Congress -- FREQUENTLY ASKED QUESTIONS -- REFERENCES -- INDEX.