The Jumbled Alphabet Soup of the Collapsed Home Mortgage Market: ABCP, CDO, CDS and RMBS

Loading...
Thumbnail Image
Penn collection
Real Estate Papers
Degree type
Discipline
Subject
Business
Real Estate
Funder
Grant number
License
Copyright date
Distributor
Author
Phillips, Georgette C
Contributor
Abstract

It all started so simply. Consumers needed access to loans to purchase a home and weave themselves into the American Dream. Lenders were constrained when capital was tied up in long term mortgages. The Government saw the opportunity to alleviate both problems by buying and bundling the home mortgages and using them as collateral (along with an implicit guarantee) for publicly traded investments on the secondary market. But, it became so complex. The market whirled out of control as investments and derivatives became more and more distant from the ultimate source of repayment-the underlying mortgages. The policy of imposing the government into capital markets has a profound effect because it not only prompts consumer behavior, but also, controls access to capital in the housing finance arena. Add lax regulation, mismatched incentives and outright greed into the brew and the result is total market failure as we have recently endured.

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
2010-01-01
Journal title
University of Miami Business Law Review
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Recommended citation
Collection