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Subprime Mortgage Crisis


The expansion of mortgages to high-risk borrowers, coupled with rising house prices, contributed to a period of turmoil in financial markets that lasted from 2007 to 2010.

A sign advertising refinancing services is posted in a vacant lot April 29, 2008, in Stockton, California. (Photo: Justin Sullivan/Getty Images News/Getty Images)

by John V. Duca, Federal Reserve Bank of Dallas


Bernanke, Ben S., “A Century of U.S. Central Banking: Goals, Frameworks, Accountability,” Speech given at "The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospects for the Future," a conference sponsored by the National Bureau of Economic Research, Cambridge, MA, July 10, 2013.

Bernanke, Ben S., “Challenges in Housing and Mortgage Markets,” Speech given at the Operation HOPE Global Financial Dignity Summit, Atlanta, GA, November 15, 2012.

Board of Governors of the Federal Reserve Board. “Federal Financial Regulatory Agencies Issue Final Statement on Subprime Mortgage Lending.” June 29, 2007.

Case, Karl E., Robert J. Shiller, and Anne K. Thompson, “What Have They Been Thinking? Homebuyer Behavior in Hot and Cold Markets,” Brookings Papers on Economic Activity, Fall 2012, 265-98.

DiMartino, Danielle, and John V. Duca.  “The Rise and Fall of Subprime Mortgages,” Federal Reserve Bank of Dallas Economic Letter 2, no. 11 (November 2007): 1-8.

Duca, John V. “The Long-Awaited Housing Recovery,” Federal Reserve Bank of Dallas Annual Report, 2013.  

Duca, John V., John Muellbauer, and Anthony Murphy. “House Prices and Credit Constraints: Making Sense of the U.S. Experience.” Economic Journal 121, no. 552 (May 2011): 533-51.

Duca, John V., and John Muellbauer, “Tobin LIVES: Integrating Evolving Credit Market Architecture into Flow of Funds Based Macro-Models,” Working Paper Series 1581, European Central Bank, Frankfurt, Germany, 2013.

Yellen, Janet L., “A Painfully Slow Recovery for America's Workers: Causes, Implications, and the Federal Reserve's Response,” Speech given at "A Trans-Atlantic Agenda for Shared Prosperity" conference in Washington, DC, February 11, 2013.

Written as of November 22, 2013. See disclaimer.

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