Synopses & Reviews
The urgent demand for housing after World War I fueled a boom in residential construction that led to historic peaks in home ownership. Foreclosures at the time were rare, and when they did happen, lenders could quickly recoup their losses by selling into a strong market. But no mortgage system is equipped to deal with credit problems on the scale of the Great Depression. As foreclosures quintupled, it became clear that the mortgage system of the 1920s was not up to the task, and borrowers, lenders, and real estate professionals sought action at the federal level.and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;
Well Worth Saving tells the story of the disastrous housing market during the Great Depression and the extent to which an immensely popular New Deal relief program, the Home Ownersandrsquo; Loan Corporation (HOLC), was able to stem foreclosures by buying distressed mortgages from lenders and refinancing them. Drawing on historical records and modern statistical tools, Price Fishback, Jonathan Rose, and Kenneth Snowden investigate important unanswered questions to provide an unparalleled view of the mortgage loan industry throughout the 1920s and early andrsquo;30s. Combining this with the stories of those involved, the book offers a clear understanding of the HOLC within the context of the housing market in which it operated, including an examination of how the incentives and behaviors at play throughout the crisis influenced the effectiveness of policy.and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;
More than eighty years after the start of the Great Depression, when politicians have called for similar programs to quell the current mortgage crisis, this accessible account of the Home Ownersandrsquo; Loan Corporation holds invaluable lessons for our own time.
Review
[Guaranteed to Fail] is more multi-dimensional and nuanced than most other books on the bloody crossroads where real estate and banking meet. . . . [The] authors show convincingly that the GSEs' subprime lending was not a noble idea that eventually went wrong or drifted into excesses--it was a fool's errand from the beginning. -- Financial Times [A] valuable book on how two quasi-public companies became 'the world's largest and most leveraged hedge fund'. . . . A balanced study, [Guaranteed to Fail] rises above a clash between partisans on the right--who call the companies 'ground zero' in the meltdown--and those on the left who blame deregulation and Wall Street excess. . . . Part primer, part policy prescription, the text explains in simple language what these entities are, how they got so big, and why we must fix them. -- James Pressley, Bloomberg News In Guaranteed to Fail, a quartet of New York University professors from its Stern School of Business, focus on the 'debacle of mortgage finance' that Fannie and Freddie helped create, and offer a plan for reform. In clear language, and with plenty of data to support their arguments, the authors provide a concise but comprehensive history of the GSEs--which alone makes their book worth reading. -- Barron's
Review
"[Guaranteed to Fail] is more multi-dimensional and nuanced than most other books on the bloody crossroads where real estate and banking meet. . . . [The] authors show convincingly that the GSEs' subprime lending was not a noble idea that eventually went wrong or drifted into excesses--it was a fool's errand from the beginning."--Financial Times
Review
"[A] valuable book on how two quasi-public companies became 'the world's largest and most leveraged hedge fund'. . . . A balanced study, [Guaranteed to Fail] rises above a clash between partisans on the right--who call the companies 'ground zero' in the meltdown--and those on the left who blame deregulation and Wall Street excess. . . . Part primer, part policy prescription, the text explains in simple language what these entities are, how they got so big, and why we must fix them."--James Pressley, Bloomberg News
Review
"In Guaranteed to Fail, a quartet of New York University professors from its Stern School of Business, focus on the 'debacle of mortgage finance' that Fannie and Freddie helped create, and offer a plan for reform. In clear language, and with plenty of data to support their arguments, the authors provide a concise but comprehensive history of the GSEs--which alone makes their book worth reading."--Barron's
Review
"Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance, stands out among all the others. . . . [I]t is one of the very few books to focus squarely on the ultimate cause of the crisis: US government housing policy and the role of the two government-backed mortgage giants Freddie Mac and Fannie Mae in giving effect to that policy."--Stephen Kirchner, The Conversation (Australia)
Review
"[T]hought-provoking."--Gillian Tett, Financial Times
Review
"[T]he authors provide a detailed template for reform."--The Economist
Review
"No one can accuse the authors of failing to offer solutions to the problems they so thoroughly document. . . . One can only hope that some trace of the constructive approach of Guaranteed to Fail will inform the ongoing debate in Washington on the vitally important question of the future structure of the U.S. mortgage market."--Martin S. Fridson, Financial Analyst Journal
Review
"This book should, without question, play an important role in the policy discussion of how to reform the mortgage market. Its accessible explanation of the GSEs' growth and behavior, and its detail and care in suggesting the direction for housing finance to go--and how to get it there--are its strengths. In terms of audience, the book seems more oriented toward policy discussions than academic ones. . . . As a whole, it provides a useful overview of the rise and fall of the GSEs, and is a worthwhile read for those interested in understanding the recent crisis."--Daniel K. Fetter, Journal of Economic Literature
Review
"[T]he scholarly NYU tome focuses on policy mistakes and perverse incentives. . . . The Stern School economists [highlight the] 'race to the bottom' among mortgage lenders . . . [who] responded by 'moving down the credit curve of increasingly shaky mortgage loans.' . . . Bad lending begat worse lending."--Robert J. Samuelson, Claremont Review of Books
Review
[T]hought-provoking . . . Stephen Kirchner - The Conversation
Review
[T]he authors provide a detailed template for reform. Gillian Tett - Financial Times
Review
"The [authors] combine in an ideal way research and political consulting, resulting in an easy-to-read book that nevertheless has the necessary in-depth analysis. The book is rich with quotes from the past suggesting that everybody should have seen the imminent disaster."--Rico von Wyss, Swiss Society for Financial Market Research
Review
"Guaranteed to Fail is one of the more comprehensive and informative books on the financial crisis. In addition to its relevance to the policy debate on homeownership and government guarantees, the book has numerous pedagogical strengths. Each chapter is well-organized, contains numerous charts and graphs, and has incredible detail regarding legislation, announcements, and media reports that impacted the housing market since the 1930s. The appendix, with a timeline of US housing finance milestones and a 32-page blueprint for reform, highlight the great effort that went into the creation of this work."--Cynthia Bansak and Peter Carpenter, Eastern Economic Journal
Review
andldquo;Forand#160;
Well Worth Saving, Price Fishback, Jonathan Rose, and Kenneth Snowden have assembled compelling new data to reassess the costs and benefits of the Home Ownerandrsquo;s Loan Corporation, developing the broader intellectual history of housing support and relating their findings to the recent financial crisis in the United States and current government programs aimed at providing relief to distressed mortgage holders. This is a well-executed and thorough work.andquot;
Review
andldquo;The recent foreclosure crisis rekindled interest in the Home Ownersandrsquo; Loan Corporation (HOLC) beyond historians of the Great Depression, with many commentators and policy makers viewing HOLC as a model for a policy response. With Well Worth Saving, Price Fishback, Jonathan Rose, and Kenneth Snowden offer a new history of the program alongside an economic analysis of its costs and benefits. This is a highly useful, well-organized, and interesting book which will be of great interest and use both to researchers and policy makers.andrdquo;
Review
and#8220;The context that Fishback, Rose, and Snowden provide is important for two reasons. First, it is crucial to understand the important role that HOLC played in response to the Depression-era mortgage crisis. Second, it greatly informs the authorsand#8217; concluding thoughts on whether a HOLC-type program would have been an appropriate response to the recent housing crisis. Recommended.and#8221;
Review
and#8220;An impressive analysis of the Home Owners Loan Corporation. . . . In this slim volume, [Fishback, Rose, and Snowden] have produced a skilful short- and long-term analysis of both mortgage markets and a significant New Deal agency. . . The book will be essential reading for all Great Depression scholars and for those interested in the impact of policy initiatives on the US nonfarm housing sector.and#8221;
Review
andldquo;A comprehensive analysis of the Home Ownersandrsquo; Loan Corporation. . . . The authors do an excellent job giving historical context to the program and explaining why events played out the way they did. They also compare and contrast the mortgage crises of the 1930s and the 2000s and explain why today it would be more difficult to implement a program like the HOLC. I learned a great deal from this book and recommend it unequivocally.andrdquo;
Synopsis
The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history. The bailout has already cost American taxpayers close to $150 billion, and substantially more will be needed. The U.S. economy--and by extension, the global financial system--has a lot riding on Fannie and Freddie. They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do. How can we limit the damage to our economy, and avoid making the same mistakes in the future?
Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations. Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling more and more housing and mortgages all across the economy--and putting all of us at risk. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a unique model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.
Synopsis
Why America's public-private mortgage giants threaten the world economy--and what to do about it
The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history. The bailout has already cost American taxpayers close to $150 billion, and substantially more will be needed. The U.S. economy--and by extension, the global financial system--has a lot riding on Fannie and Freddie. They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do. How can we limit the damage to our economy, and avoid making the same mistakes in the future?
Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations. Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling more and more housing and mortgages all across the economy--and putting all of us at risk. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a unique model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.
Synopsis
"
Guaranteed to Fail is a down-to-earth analysis of why Fannie Mae and Freddie Mac collapsed and why housing finance is broken. The authors provide clear solutions to fixing this complex problem. This is a timely and important book."
--Nouriel Roubini, coauthor of Crisis Economics: A Crash Course in the Future of Finance"Guaranteed to Fail is a comprehensive and well-written study of the role played by Fannie and Freddie in the events leading up to the financial crisis. It also suggests the way forward. This book is timely as well as insightful, and will be an influential contribution to the debate on the role of government-sponsored enterprises."--Raghuram G. Rajan, author of Fault Lines: How Hidden Fractures Still Threaten the World Economy
"This is an excellent book. Guaranteed to Fail presents a cogent proposal for the resolution of the current conservatorship of Fannie Mae and Freddie Mac. It documents the historical, economic, political, and financial issues that led to the current crisis, and presents all the issues in a fair and informative manner."--Dwight Jaffee, University of California, Berkeley
Synopsis
The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history. The bailout has already cost American taxpayers close to $150 billion, and substantially more will be needed. The U.S. economy--and by extension, the global financial system--has a lot riding on Fannie and Freddie. They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do. How can we limit the damage to our economy, and avoid making the same mistakes in the future?
Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations. Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling more and more housing and mortgages all across the economy--and putting all of us at risk. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a unique model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.
Synopsis
"Guaranteed to Fail is a down-to-earth analysis of why Fannie Mae and Freddie Mac collapsed and why housing finance is broken. The authors provide clear solutions to fixing this complex problem. This is a timely and important book."--Nouriel Roubini, coauthor of Crisis Economics: A Crash Course in the Future of Finance
"Guaranteed to Fail is a comprehensive and well-written study of the role played by Fannie and Freddie in the events leading up to the financial crisis. It also suggests the way forward. This book is timely as well as insightful, and will be an influential contribution to the debate on the role of government-sponsored enterprises."--Raghuram G. Rajan, author of Fault Lines: How Hidden Fractures Still Threaten the World Economy
"This is an excellent book. Guaranteed to Fail presents a cogent proposal for the resolution of the current conservatorship of Fannie Mae and Freddie Mac. It documents the historical, economic, political, and financial issues that led to the current crisis, and presents all the issues in a fair and informative manner."--Dwight Jaffee, University of California, Berkeley
Synopsis
The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history. The bailout has already cost American taxpayers close to $150 billion, and substantially more will be needed. The U.S. economy--and by extension, the global financial system--has a lot riding on Fannie and Freddie. They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do. How can we limit the damage to our economy, and avoid making the same mistakes in the future?
Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations. Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling more and more housing and mortgages all across the economy--and putting all of us at risk. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a unique model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.
Synopsis
"
Guaranteed to Fail is a down-to-earth analysis of why Fannie Mae and Freddie Mac collapsed and why housing finance is broken. The authors provide clear solutions to fixing this complex problem. This is a timely and important book."--Nouriel Roubini, coauthor of
Crisis Economics: A Crash Course in the Future of Finance"Guaranteed to Fail is a comprehensive and well-written study of the role played by Fannie and Freddie in the events leading up to the financial crisis. It also suggests the way forward. This book is timely as well as insightful, and will be an influential contribution to the debate on the role of government-sponsored enterprises."--Raghuram G. Rajan, author of Fault Lines: How Hidden Fractures Still Threaten the World Economy
"This is an excellent book. Guaranteed to Fail presents a cogent proposal for the resolution of the current conservatorship of Fannie Mae and Freddie Mac. It documents the historical, economic, political, and financial issues that led to the current crisis, and presents all the issues in a fair and informative manner."--Dwight Jaffee, University of California, Berkeley
About the Author
Price Fishback is the Thomas R. Brown Professor of Economics at the University of Arizona and a research associate of the NBER. He is the author or editor of several books, including A Prelude to the Welfare State and Government and the American Economy, both also published by the University of Chicago Press. He lives in Tucson, AZ. Jonathan Rose is an economist with the Federal Reserve Board of Governors and lives in Washington, DC. Kenneth Snowden is associate professor of economic history at the University of North Carolina at Greensboro and a research associate of the NBER. He lives in Greensboro, NC.
Table of Contents
Preface
1and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; Introduction
2and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; The Patchwork Mortgage Market in the 1920s
3and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; The Mortgage Crisis
4and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; Pressures for Government Action
5and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; The Economic Rationale for the HOLC
6and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; An HOLC Primer
7and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; The Lendersand#8217; Good Deal
8and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; The Borrowersand#8217; Good Deal
9and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160;and#160; Repairing Mortgage and Housing Marketsand#160;and#160;and#160;and#160;and#160;
10and#160;and#160;and#160;and#160;and#160;and#160;and#160; The Cost to Taxpayers and Subsidies to the Housing Market
11and#160;and#160;and#160;and#160;and#160;and#160;and#160; Conclusion
Appendix: Walking through the Analysis of the Impact of the HOLC
Notes
References
Index