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Notes to Chapter 6 567

4. Fed Governor Ben S. Bernanke, “The Great Moderation,” remarks at the meetings of the Eastern
Economic Association, Washington, D.C., February 20, 2004. See also Olivier Blanchard and John Si-
mon, “The Long and Large Decline in U.S. Output Volatility,” Brookings Papers on Economic Activity, no.
1 (2001): 135–64.
5. Fed Governor Ben S. Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” remarks before
the National Economists Club, Washington, D.C., November 21, 2002.
6. FCIC staff calculations from Board of Governors of the Federal Reserve System, H.15 Selected In-
terest Rate release, 3-month AA Nonfinancial Commercial Paper Rate, WCPN3M (weekly, ending Fri-
day); U.S. Department of Treasury, Daily Treasury Yield Curve Rates, 1990 to Present.
7. This example assumes that the homeowner is able to come up with a larger down payment to cover
20% of the higher-priced home. Here, the difference would be about $13,000.
8. Federal Housing Finance Agency, “Data on the Risk Characteristics and Performance of Single-
Family Mortgages Originated from 2001 through 2008 and Financed in the Secondary Market” (Septem-
ber 13, 2010), Table 2a: Share of Single-Family Mortgages Originated from 2001 through 2008 and
Acquired by the Enterprises or Finances with Private-Label MBS by Loan-to-Value Ratio and Borrower
FICO Score at Origination, Adjustable-Rate Mortgages, p. 22. Prime borrowers are defined as those
whose mortgages are financed by the government-sponsored enterprises.
9. Yuliya Demyanyk and Otto Van Hemert, “Understanding the Subprime Mortgage Crisis” (Decem-
ber 5, 2008), table 1: Loan Characteristics at Origination for Different Vintages, p. 7.
10. FCIC staff calculations from CoreLogic/First American, Home Price Index for Single-Family
Combined State HPI data, last updated August 2010, and CoreLogic State Home Price Index, provided to
the FCIC by CoreLogic. Staff calculations of all annual growth rates are compound annual growth rates
from January to January.
11. U.S. Census Bureau, “Housing Vacancies and Homeownership, CPS/HVS,” Table 14: Homeowner-
ship Rates for the US 1965 to Present.
12. Brian K. Bucks, Arthur B. Kennickell, and Kevin B. Moore, “Recent Changes in US Family Fi-
nances: Evidence from the 2001 and 2004 Survey of Consumer Finances,” Federal Reserve Bulletin (2006):
Tables 8A and 8B, pp. A20–A23, A8.
13. Congressional Budget Office, “Housing Wealth and Consumer Spending,” Background Paper, Jan-
uary 2007, p. 15.
14. Mortgages may have been refinanced more than once in that year.
15. FCIC staff calculations with updated data provided by Alan Greenspan and James Kennedy,
whose data originally appeared in “Sources and Uses of Equity Extracted from Homes,” Finance and Eco-
nomics Discussion Series, Federal Reserve Board, 2007-20 (March 2007).
16. CBO, “Housing Wealth and Consumer Spending,” p. 2.
17. Fed Chairman Alan Greenspan, “The Economic Outlook,” prepared testimony before the Joint
Economic Committee, 107th Cong., 2nd sess., November 13, 2002.
18. Fed Chairman Alan Greenspan, “Federal Reserve Board’s Semiannual Monetary Policy Report to
the Congress,” prepared testimony before the House Committee on Financial Services, 108th Cong., 2nd
sess., February 12, 2004.
19. FCIC staff calculations from 2009 Mortgage Market Statistical Annual, 1:4, “Mortgage Origina-
tions by Product” (total subprime volume); 2:13, “Non-Agency MBS Issuance by Type” (subprime PLS).
20. Ibid., 1:3, “Mortgage Origination Indicators”; 220, 227, “Mortgage Originations by Product.”
21. Bart McDade, interview by FCIC, April 16, 2010.
22. Presentation to the Lehman Board of Directors, March 20, 2007. Lehman had also acquired three
international lenders during this time period.
23. New Century, 1999 10-K, March 30, 2000, p. 2.
24. Final Report of Michael J. Missal, Bankruptcy Court Examiner, in RE: New Century TRS Hold-
ings, Chapter 11, Case No. 07-10416 (KJC), (Bankr. D.Del.), February 29, 2008, p 42.
25. New Century, 2000 10-K, April 2, 2001, p. 15; New Century, 2003 10-K, March 15, 2004, p. 13.
Rankings from 2009 Mortgage Market Statistical Annual, 1:220, 223.
26. Aseem Mital and Angelo Mozilo, quoted in Erick Bergquist, “Under Scrutiny, Ameriquest Details
Procedures,” American Banker 170, no. 125 (June 30, 2005): 1. Volume and rankings from 2009 Mortgage
Market Statistical Annual, 1:220, 223.