Economics, Econometrics and Finance
4 years ago

Mortgage market concentration fuels risky lending, inflates house prices, study finds.

SSRN Electronic Journal
Too Much Skin-in-the-Game?: The Effect of Mortgage Market Concentration on Credit and House Prices
Deeksha Gupta

Paper Summary

The article discusses how big lenders may take more risks in the mortgage market during a housing boom to support house prices. This can help them avoid losses on their existing mortgages. However, when the housing market crashes, these lenders gradually reduce their risky lending.

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