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The Value of Intermediaries for GSE Loans / Joshua Bosshardt, Ali Kakhbod, Amir Kermani.
- Format:
- Book
- Author/Creator:
- Bosshardt, Joshua.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w31575.
- NBER working paper series no. w31575
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2023.
- Summary:
- We analyze the costs and benefits of intermediaries for government-sponsored enterprise (GSE) mortgages using regulatory data. We find evidence of lenders pricing for observable and unobservable default risk independently from the GSEs. These findings are explained using a model of competitive lending in which lenders have skin-in-the-game and acquire information beyond the GSEs' underwriting criteria, but also charge markups. We find that most borrowers are better off in a counterfactual in which the GSEs' underwriting criteria are implemented passively. Finally, the observed differences between banks and nonbanks are more consistent with differences in their skin-in-the-game rather than screening quality.
- Notes:
- Print version record
- August 2023.
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