GUARANTEED TO FAIL: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance

March 19, 2014 in STOP FORECLOSURE FRAUD

Guaranteed to Fail Fannie, Freddie, and the Debacle of Mortgage Finance

Forthcoming January 2011, Princeton University Press Authors: Viral V. Acharya, Professor of Finance, NYU Stern School of Business, NBER and CEPR Matthew Richardson, Charles E. Simon Professor of Applied Financial Economics, NYU Stern School of Business and NBER Stijn Van Nieuwerburgh, Associate Professor Finance, NYU Stern School of Business, NBER and CEPR Lawrence J. White, Arthur E. Imperatore Professor of Economics, NYU Stern School of Business Acknowledgments Many insights presented in this book were developed during the development of two earlier books that the four of us contributed to at NYU-Stern: Restoring Financial Stability: How to Repair a Failed System (Wiley, March 2009); and Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance (Wiley, October 2010). We owe much to all of our colleagues who contributed to those books, especially those who contributed to the chapters on the government-sponsored enterprises (GSEs): Dwight Jaffee (who was visiting Stern during 2008-09), T. Sabri Oncu (also visiting Stern during 2008-10), and Bob Wright. We received valuable feedback on the first draft of the book from Heitor Almeida, Ralph Koijen, and Amit Seru, useful expositional comments from Sanjay Agarwal, Les Levi and Manjiree Jog, and excellent research assistance from Vikas Singh on how countries other than the United States deal with home ownership and mortgage markets. We would like to thank Robert Collender, principal policy analyst at the FHFA, for helping us better understand the FHFA data. We are also grateful to the professionalism of staff at the Princeton University Press, especially Seth Ditchik, who managed the process for us right from the book proposal to eventual publication. Finally, we owe substantial gratitude to a number of economists, policy-makers, and practitioners – some named in the book and others unnamed – who have over the past two decades studied the GSEs, with prescience pointed out the flaws in their design and warned of the likely adverse consequences due these flaws. Their collective wisdom has shaped our understanding of the GSEs in significant measure and helped us provide original recommendations for much-needed reform of mortgage finance in the United States.