## Money for Nothing and Checks for Free: Recent Developments in U.S. Subprime Mortgage Markets

_IMF Working Papers, July 1, 2007_

## Source details

**Canonical URL:** [Money for Nothing and Checks for Free: Recent Developments in U.S. Subprime Mortgage Markets](https://www.imf.org/en/publications/wp/issues/2016/12/31/money-for-nothing-and-checks-for-free-recent-developments-in-u-s-21200)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/money-for-nothing-and-checks-for-free-recent-developments-in-u-s-21200/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/money-for-nothing-and-checks-for-free-recent-developments-in-u-s-21200/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/money-for-nothing-and-checks-for-free-recent-developments-in-u-s-21200/bundle-manifest.json)

## Bibliographic details
- Authors: Paul S. Mills, John Kiff
- Published: July 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451867527.001

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### Summary
- After a number of warning signs, the U.S. "subprime mortgage crisis" became a headline issue in February 2007.
- Notwithstanding the bankruptcy of numerous mortgage companies, historically high delinquencies and foreclosures, and a significant tightening in subprime lending standards, the impact thus far on core U.S. financial institutions has been limited.
- The paper reviews the history and structure of the subprime market and explores potential solutions to a key trade-off.

### Key findings and analysis
- New origination and funding technology appear to have made the financial system more stable.
- The same technological changes have undermined the effectiveness of consumer protection regulation.
- The paper assesses the history and structure of the subprime market to support these conclusions.

### Policy implications and potential solutions
- The paper explores potential solutions to manage the trade-off between increased financial stability from new origination and funding technologies and weakened consumer protection regulation.
- Specific policy recommendations are discussed in the paper (details not reproduced on the landing page).

### Subject and keywords
- Subject: Credit, Housing prices, Loans, Mortgages, Securities
- Keywords: borrower, loan, mortgage, securitization, subprime mortgage, tranche, WP

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## Content in this bundle

- **1. Homeownership Rate**
  - [1. Homeownership Rate (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp07188.pdf.md){rel="alternate" type="text/markdown"}
  - [1. Homeownership Rate (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp07188.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/money-for-nothing-and-checks-for-free-recent-developments-in-u-s-21200_