The course of empire: A retrospective on the US housing crisis
In a recent 'Eye on the Market' outlook, Michael Cembalest of JP Morgan cited the work of AEI Resident Scholar Ed Pinto as forming the foundation of the analyses used in 'The Course of Empire': a retrospective on the US housing crisis

Editor’s Note: In a recent “Eye on the Market” outlook, Michael Cembalest of JP Morgan cited the work of AEI Resident Scholar Ed Pinto as forming the foundation of the analyses used in “The Course of Empire”: a retrospective on the US housing crisis, which opens with:

Thomas Cole’s 19th century paintings entitled Course of Empire, chronicling the rise and fall of civilizations, have been re-interpreted below as a commentary on the US housing crisis. Why now? This retrospective is made possible in part by a decision by the Federal Housing Finance Authority requiring Freddie Mac and Fannie Mae to finally release detailed information on loans they acquired and guaranteed1. The release was only required on 35 million fully-amortizing, full-documentation, 30-year fixed rate mortgages, meaning that the underwriting histories on another roughly 20-30 million loans (e.g., the riskier ones) remain a mystery. Even so, this conveniently selective disclosure adds to the evolving understanding of what took place, and why.

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About the Author

 

Edward J.
Pinto
  • American Enterprise Institute (AEI) resident fellow Edward J. Pinto is the codirector of AEI’s International Center on Housing Risk. He is currently researching policy options for rebuilding the US housing finance sector and specializes in the effect of government housing policies on mortgages, foreclosures, and on the availability of affordable housing for working-class families. Pinto writes AEI’s monthly Housing Risk Watch, which has replaced AEI’s FHA Watch. Along with AEI resident scholar Stephen Oliner, Pinto is the creator and developer of the AEI Pinto-Oliner Mortgage Risk, Collateral Risk, and Capital Adequacy Indexes.


    An executive vice president and chief credit officer for Fannie Mae until the late 1980s, Pinto has done groundbreaking research on the role of federal housing policy in the 2008 mortgage and financial crisis. Pinto’s work on the Government Mortgage Complex includes seminal research papers submitted to the Financial Crisis Inquiry Commission: “Government Housing Policies in the Lead-up to the Financial Crisis” and “Triggers of the Financial Crisis.” In December 2012, he completed a study of 2.4 million Federal Housing Administration (FHA)–insured loans and found that FHA policies have resulted in a high proportion of working-class families losing their homes.

    Pinto has a J.D. from Indiana University Maurer School of Law and a B.A. from the University of Illinois at Urbana-Champaign.

  • Phone: 240-423-2848
    Email: edward.pinto@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: 202-419-5212
    Email: emily.rapp@aei.org

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