SOURCE: Milken Institute

Milken Institute

February 22, 2012 08:04 ET

Solutions for a More Stable Housing Finance System

New Book by Leading Experts Franklin Allen, James R. Barth, and Glenn Yago Explains How to Build on Past Insights to Create a More Sustainable System for the Future

LOS ANGELES, CA--(Marketwire - Feb 22, 2012) - The same tool that many blame for the current housing slump is actually the key to facilitating a more stable and sustainable financing system for housing: financial innovation.

Ever since the ancient Greeks, financial innovation has enabled more people to purchase homes. Today is no different: in fact, responsible financial innovation is now the best tool available for rebooting crippled housing markets, improving their efficiency, and making housing more accessible to millions. In "Fixing the Housing Market: Financial Innovations for the Future" (Pearson Prentice Hall, ISBN: 9780137011605, $34.99, 208 pages, February 2012), three leading experts explain how, covering everything decision-makers should know about today's housing and financial markets.

"Even though complex and opaque securitization contributed in part to today's housing slump, by no means should that make us afraid of the power of financial innovation to improve the market for the future," says author Franklin Allen.

The authors begin by explaining how housing financial products, services and institutions evolved through the 19th century, World War I, the Great Depression, World War II, and beyond -- culminating in the post-1970s era of securitization. Next, they assess housing finance systems in mature economies during and after the recent crisis, highlighting benefits and risks associated with each widely used mortgage funding structure and product. They also assess current housing finance structures in emerging economies such as Brazil, Russia, India and China.

"Growth in the United States -- and globally -- will be hobbled without a recovery of a sustainable housing market," says author Glenn Yago. "The need to create housing and urban centers that are sustainable, both environmentally and financially, requires innovations in construction, energy efficiency -- and housing finance."

For anyone interested in the challenges and solutions associated with the current housing slump, this book will build on insights into the past and ultimately explore practical development strategies to bridge funding gaps for the future -- raising more capital for longer terms at lower cost. "Fixing the Housing Market" will:

  • Demystify housing finance, showing how financial innovation can overcome information gaps that disrupt housing markets, promote homeownership, and make housing more affordable
  • Help entrepreneurs, economic development specialists and policymakers develop strategies for improving the housing markets in their specific regions
  • Reflect crucial lessons learned in the housing bubble and bust

About the Authors

  • Franklin Allen (Philadelphia), Professor of Finance and Economics at Wharton, co-directs its Financial Institutions Center. He coauthored Financing the Future and Principles of Corporate Finance.
  • James R. Barth (Santa Monica, Cal.), Lowder Eminent Scholar in Finance at Auburn and Milken Institute Senior Fellow, coauthored (with Glenn Yago) The Rise and Fall of the U.S. Mortgage and Credit Markets.
  • Glenn Yago (Santa Monica, Cal.), Milken Institute Senior Director/Senior Fellow founded its Financial Innovations Labs and coauthored Financing the Future.

About the Milken Institute
A nonprofit, nonpartisan think tank, the Milken Institute believes in the power of capital markets to solve urgent social and economic challenges. Its mission is to improve lives around the world by advancing innovative economic and policy solutions that create jobs, widen access to capital and enhance health. (www.milkeninstitute.org)

Contact Information

  • If you are interested in receiving a copy of "Fixing the Housing Market" or an interview of one of the authors, please contact
    media@ftpress.com

    Conrad Kiechel
    Director of Communications
    (310) 570-4668
    ckiechel@milkeninstitute.org