ECON 252 (2011) - Lecture 10 - Real Estate

Lecture 10 - Real Estate

Overview

Real estate finance has been crucially important throughout its very long and complex history. Describing the history of mortgage financing, Professor Shiller highlights the historical development of well-institutionalized property rights for mortgage contracts. Subsequently, he focuses on modern financial institutions for commercial real estate, elaborating on Direct Participation Programs and Real Estate Investment Trusts as means for its financing. The distinction between short-term, balloon-payment mortgages before the Great Depression and long-term, amortizing mortgages thereafter shapes the discussion of residential real estate. His discussion of mortgage securitization and government support of mortgage markets centers around Fannie Mae and Freddie Mac, from their inception in 1938 and 1970, respectively, to the U.S. government's decision to put them into federal conservatorship in 2008. Finally, Professor Shiller covers collateralized mortgage obligations (CMOs) and elaborates on moral hazard in the mortgage origination process.

Resources

Assignment

Fabozzi, Foundations of Financial Markets, Ch. 22–25

Shiller, Finance and the Good Society, Ch. 9

Course Media

Transcript

html

Audio

mp3

Low Bandwidth Video

mov [100MB]

High Bandwidth Video

mov [500MB]