FHFA yesterday released a sweeping paper using its own internal data along with everything else it could find on U.S. purchase-money mortgage loans from 1990 to 2017 to derive a new stress-default risk paradigm.  Like a previous ground-breaking paper, FHFA’s working paper concludes that lending to subprime borrowers isn’t the problem – crisis risks come from loan terms that facilitate property and household leverage.

The full report is available to subscription clients. To find out how you can sign up for the service, click here.