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- Title
Not All Housing GSEs Are Alike: An Analysis of the Federal Home Loan Bank System and the Foreclosure Crisis.
- Authors
Cassell, Mark K.; Hoffmann, Susan M.
- Abstract
While the financial crisis of 2008 ultimately affected the range of U.S. financial institutions, it began with practices in home ownership finance. The Federal Home Loan Bank (FHLBank) System was the first instrumentality created by the U.S. government, in 1932, to sustain affordable home ownership finance. In this article, the authors ask what role, if any, the FHLBanks played in the subprime lending and securitization practices that precipitated the current crisis. The authors analyze publicly available FHLBank financial data in terms of a framework focused on the System's assets: advances; mortgage loans acquired from members; and investments, particularly in mortgage-backed-securities. They conclude that the FHLBanks did not contribute significantly to problematic practices. Nonetheless, they recommend consideration of three reforms to the FHLBanks to ensure a return to effective regulation and responsible, affordable home ownership finance.
- Subjects
UNITED States; GOVERNMENT-sponsored enterprises; FEDERAL home loan banks; FORECLOSURE; GLOBAL Financial Crisis, 2008-2009; FINANCIAL institutions; HOUSING finance
- Publication
Public Administration Review, 2009, Vol 69, Issue 4, p613
- ISSN
0033-3352
- Publication type
Article
- DOI
10.1111/j.1540-6210.2009.02010.x