Three Essays on Housing and Credit — China Health and Nutrition Survey (CHNS)

Citation:

Xu, Yilan. (2012). Three Essays on Housing and Credit. Master's thesis / Doctoral dissertation, University of Pittsburgh.

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Abstract:

The late-2000s financial crisis has brought great attention to housing market and home mortgage market. I study housing and credit issues using evidence from the United States and China. In Chapter 1, I examine how a court-mandated repeal of a home mortgage regulation in Cleveland affected home foreclosures. To distinguish the effect of deregulation from confounding factors, I apply a difference-in-difference research design using suburbs as the control group for Cleveland. Results indicate that deregulation caused a 49 percent increase in early foreclosures while it did not increase total loan originations. This result implies that bad loans as a share of overall loans increased substantially. In Chapter 2, I evaluate the impact of housing provident funds (HPFs), saving programs that collect deposits from employees and their employers and provide mortgage loans with discounted rates. I exploit a natural experiment in China where the amount of home loans available to employees depends on previous deposits to the fund. Results indicate that after HPF loans became available in 1998, households with two members enrolled in the HPF program enjoyed homeownership 18 percent greater than those with only one member enrolled. Furthermore, each additional year of HPF deposits increased homeownership by 4 percent. The results suggest that HPF loans allow higher housing consumption for eligible contributors. In Chapter 3, my coauthor and I document that home mortgage loans made by out-of-state banks without local branches are more likely to have high interest rates and are sold more to the secondary market than other types of mortgages. Drawing evidence from Home Mortgage Disclosure Act Data from 2005 to 2008, we find that the demand for nonlocal mortgages is larger in the neighborhood where local banks' denial rate is higher. And banks make more nonlocal mortgages to out-of-state borrowers if they have better access to the secondary market. The results suggest that securitization may provide bad incentives for risk-taking. Keywords : deregulation; foreclosure; credit access; housing consumption; nonlocal lending; securitization.

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Reference Type:
THES

Secondary Title:

Series Title:

Author(s):
Xu, Yilan

Editor(s):

Series Author(s):
Berkowitz, Daniel

Year Published:
2012

Date Published:

Journal Name:

Volume Number:
3533025

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Start Page Number:
94

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Edition:

Series Volume:

Publisher:
University of Pittsburgh

City of Publication:
Ann Arbor

ISSN/ISBN:
9781267766243

DOI:

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Reference ID:
1987

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