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Notes to Chapter 9 581

3. Lloyd Plank, Lloyd E. Plank Real Estate Consultants, written testimony for the FCIC, Hearing on
the Impact of the Financial Crisis—Greater Bakersfield, session 4: Local Housing Market, September 7,
2010, p. 2.
4. CoreLogic Single Family Combined (SFC) Home Price Index, data accessed August 2010. FCIC
calculation of change from January 1997 to April 2006, peak.
5. Professor Robert Shiller, Historical Housing data..
6. Final Report of Michael J. Missal, Bankruptcy Court Examiner, In RE: New Century TRS Holdings,
Chapter 11, Case No. 07-10416 (KJC), (Bankr. D.Del), February 29, 2008, pp. 145, 138, 139–40 (hereafter
Missal).
7. Ibid., p. 3.
8. Nomura Fixed Income Research, “Notes from Boca Raton: Coverage from Selected Sessions of ABS
East 2005,” September 20, 2005, pp. 5–7.
9. Alan Greenspan, “The Economic Outlook,” testimony before the Joint Economic Committee, 109th
Cong., 1st sess., June 9, 2005.
10. Christopher Mayer, written testimony for the FCIC, Forum to Explore the Causes of the Financial
Crisis, day 2, session 5: Mortgage Lending Practices and Securitization, February 27, 2010, pp. 5–6.
11. Antonio Fatás, Prakash Kannan, Pau Rabanal, and Alasdair Scott, “Lessons for Monetary Policy
from Asset Price Fluctuations Leaving the Board,” International Monetary Fund, World Economic Out-
look (Fall 2009), chapter 3.
12. James MacGee, “Why Didn’t Canada’s Housing Market Go Bust?” Federal Reserve Bank of Cleve-
land. Economic Comment (December 2, 2009).
13. Morris A. Davis, Andreas Lehnert, and Robert F. Martin, “The Rent-Price Ratio for the Aggregate
Stock of Owner-Occupied Housing,” Federal Reserve Board Working Paper, May 2005, p. 2.
14. Price data from CoreLogic CSBA Home Price Index, Single-Family Combined. Rent data is Bu-
reau of Labor Statistics, metro-level Consumer Price Index (CPI-U), Owners’ Equivalent Rent for Pri-
mary Residence; all index figures are adjusted so that Jan. 1997=1. Methods follow from Federal Reserve
Bank of San Francisco Economic Letter, “House Prices and Fundamental Value,” Number 2004–27, Oc-
tober 1, 2004.
15. National Association of Realtors Housing Affordability Index, accessed from Bloomberg as com-
posite Index (HOMECOMP). The index began in 1986.
16. The index also assumes that the qualifying ratio of 25%, so that the monthly principal & interest
payment could not exceed 25% of the median family monthly income. More about the methodology can
be found at National Association of Realtors, Methodology for the Housing Affordability Index.
17. Ben Bernanke, letter to FCIC Chairman Phil Angelides, December 21, 2010, p. 2.
18. Kristopher S. Gerardi, Christopher L. Foote, and Paul S. Willen, “Reasonable People Did Disagree:
Optimism and Pessimism about the U.S. Housing Market Before the Crash,” Federal Reserve Bank of
Boston Public Policy Discussion Paper No. 10-5, August 12, 2010.
19. Donald L. Kohn, “Monetary Policy and Asset Prices,” speech delivered at “Monetary Policy: A
Journey from Theory to Practice,” a European Central Bank Colloquium held in honor of Otmar Issing,
Frankfurt, Germany, March 16, 2006.
20. Richard A. Brown, “Rising Risks in Housing Markets,” memorandum to the National Risk Com-
mittee of the Federal Deposit Insurance Corporation, March 21, 2005, pp. 1–2.
21. Board of Governors, memorandum from Josh Gallin and Andreas Lehnert to Vice Chairman
[Roger] Ferguson, “Talking Points on House Prices,” May 5, 2005, p. 3.
22. Missal, p. 40.
23. William Black, testimony before the FCIC, Hearing on the Impact of the Financial Crisis—Miami,
Florida, session 1: Overview of Mortgage Fraud, September 21, 2010, transcript, p. 78; and email from
William Black to FCIC, December 12, 2010.
24. Reply of Attorney General Lisa Madigan (Illinois) to the FCIC, April 27, 2010, p. 7.
25. Chris Swecker, Assistant Director Criminal Investigative Division Federal Bureau of Investigation,
statement before the House Financial Services Subcommittee on Housing and Community Opportunity,
108th Cong., 2nd sess., October 7, 2004.
26. Florida Department of Law Enforcement, “Mortgage Fraud Assessment,” November 2005.