Seminarios Académicos

Abstract: "Using property transaction and financing data, we document large cross-sectional differences in how effective houses are as collateral for mortgages. Older and less standardized houses tend to have higher price dispersion, and their appraisal values tend to deviate more from transaction prices. Mortgages collateralized by these houses are more likely to be rejected, have lower loan-to-price ratios, and higher risk-adjusted cost menu. This effect is stronger for home buyers with higher default risk, consistent with the collateral channel. We quantify the effect on homeownership gap using a lifecycle model with collateral constraints. We discuss the implications of our findings for FHA mortgage program, the shift from human to automated appraisals, and housing
affordability policies."