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SUMMARY:Untangling the US Mortgage Crisis: Sorting out the key causes - Pr
 of Alex F. Schwartz from Milano The New School for Management and Urban Po
 licy
DTSTART:20100505T150000Z
DTEND:20100505T160000Z
UID:TALK24818@talks.cam.ac.uk
CONTACT:Ellen Ihrig
DESCRIPTION:About the speaker:\nAlex F. Schwartz is Associate Professor at
  Milano The New School for Management and Urban Policy and Chairman of the
  school's Department of Urban Policy Analysis and Management. He is also S
 enior Research Associate at the Community Development Research Center (CDR
 C). Professor Schwartz's principal area of research centres on housing and
  community development\, including affordable housing programs\, community
  reinvestment\, and community development corporations. His most recent pu
 blication is Housing Policy in the United States: 2nd Edition (Routledge\,
  2010).\n\nAbout the seminar:\nThe collapse of the mortgage market in the 
 United States and the consequent worldwide financial crisis has been expla
 ined in many ways.One explanation\, shared by analysts of otherwise opposi
 ng political persuasions\, faults the promotion of home ownership\, especi
 ally among low-income households. Others see the crisis as the inevitable 
 consequence of securitization and "financialization." In this paper\, I sh
 ow that\, contrary to much of the academic\, policy\, and popular discours
 e\, home-purchase mortgages were of secondary importance in fueling the su
 rge in subprime mortgages. Far more important were mortgage refinancing fo
 r existing homeowners. And although low-income and minority borrowers acco
 unt for a disproportionate share of subprime loans\, the majority went to 
 higher-income and white borrowers. Secondly\, I will argue that there is n
 othing inherent to mortgage securitization that led to the crisis. It was 
 the lethal combination of negligent mortgage underwriting and financial "i
 nnovation" (the creation of every more complex and opaque mortgage-backed 
 securities) that caused the mortgage market to collapse\, and bring about 
 a worldwide financial and economic crisis of historic proportion. 
LOCATION:Mill Lane Lecture Rooms\, Room 1
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