Mortgage refinance activity may have been the true hidden culprit behind the housing crisis, according to a new report by the Urban Institute (UI) written by Laurie Goodman, co-director of UI’s Housing Finance Policy Center.
Widespread refis ignited housing problems
Mortgage refinancers were more prone to default than mortgages taken out to obtain a home “mostly because many people were treating their homes as ATMs through cash-out refinances,” Goodman says.
Eighty-four percent of government-sponsored enterprise (Fannie Mae and Freddie Mac) refinances in 2006 and 2007 were cash-out refinances. These types of refinances at that time tended to have “sloppier underwriting” and therefore tended to default more than purchase loans, Goodman says.
The analysis notes that between 1999 and 2015, 4.48 percent of refis and 3.3 % of purchase loans were more than 180 days delinquent. In 2007, the peak year, 15.78 percent of refis and 9.95 % of purchase loans were over 180 days delinquent.
“Conventional wisdom suggests that refis should be less risky than purchase loans and default less because the borrowers have a known history of payment,” Goodman says. “So these results are surprising, especially given the stronger credit characteristics of refis, such as lower loan-to-value and debt-to-income ratios.”
Many housing experts blamed government policies geared towards increasing first-time home-buyers for spawning the housing crisis. However the new report reveals that “although there is a lot of blame to go around for the poor quality of loans before the housing crisis, the data reaffirms that purchase borrowers were not the primary culprits,” Goodman writes.
With interest rates as low as they have been why would you not opt for a new home? If you are ready to find your new home? Nick & Cindy Davis with RE/MAX Premier Group are here to assist you. We are always just a click here or call to 813-300-7116 away.
See All Homes in and Around Tampa Florida
- List View
- Map View
- Grid View
-
-
Lot Size4,792 sqft
-
Home Size1,607 sqft
-
Beds4 Beds
-
Baths2 Baths
-
Year Built2025
-
Days on Market1
-
-
-
Lot Size10,019 sqft
-
Home Size1,999 sqft
-
Beds4 Beds
-
Baths2 Baths
-
Year Built1987
-
Days on Market1
-
-
-
Lot Size14,375 sqft
-
Home Size2,119 sqft
-
Beds5 Beds
-
Baths2 Baths
-
Year Built1960
-
Days on Market1
-
-
-
Lot Size6,970 sqft
-
Home Size1,920 sqft
-
Beds3 Beds
-
Baths3 Baths
-
Year Built1999
-
Days on Market1
-
-
-
Lot Size4,792 sqft
-
Home Size1,269 sqft
-
Beds3 Beds
-
Baths2 Baths
-
Year Built2025
-
Days on Market1
-
-
-
Lot Size
-
Home Size1,050 sqft
-
Beds2 Beds
-
Baths1 Bath
-
Year Built2007
-
Days on Market1
-
-
-
Lot Size
-
Home Size1,224 sqft
-
Beds2 Beds
-
Baths3 Baths
-
Year Built1998
-
Days on Market1
-
-
-
Lot Size9,584 sqft
-
Home Size2,173 sqft
-
Beds6 Beds
-
Baths2 Baths
-
Year Built1964
-
Days on Market1
-
-
-
Lot Size
-
Home Size576 sqft
-
Beds1 Bed
-
Baths1 Bath
-
Year Built1997
-
Days on Market1
-
-
-
Lot Size17,424 sqft
-
Home Size5,050 sqft
-
Beds5 Beds
-
Baths7 Baths
-
Year Built1947
-
Days on Market1
-
-
-
Lot Size
-
Home Size672 sqft
-
Beds2 Beds
-
Baths1 Bath
-
Year Built1971
-
Days on Market1
-
See all All Homes Around Tampa.
(all data current as of
3/31/2025)
Listing information deemed reliable but not guaranteed. Read full disclaimer.
Narrow Your Search!