Nonconforming preferences: Jumbo mortgage lending and large bank stress tests

Arbeitspapier

The 2010s saw a profound shift towards jumbo mortgage lending by large banks that are regulated under the Dodd-Frank Act. Using data from the Home Mortgage Disclosure Act, we show that the "jumbo shift" is correlated with being subject to the Comprehensive Capital Analysis and Review (CCAR) stress tests, and that financial regulation caused CCAR-regulated banks to change preference for nonconforming relative to conforming loans of similar size. We discuss potential mechanisms through which regulation could have affected bank incentives.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Report ; No. 1029

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: CCAR ; mortgage lending ; bunching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Haughwout, Andrew ; Morgan, Donald P. ; Neubauer, Michael ; Pinkovskiy, Maxim ; Van der Klaauw, Wilbert
• Event: Veröffentlichung
• (who): Federal Reserve Bank of New York
• (where): New York, NY
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/266113
• Last update: 10.03.2025, 11:42 AM CET