Open Collections

Zheng, Keling

University of British Columbia

This dissertation consists three essays that explore how government interventions impact credit allocation and resource distribution in the U.S. mortgage and housing markets. The first essay studies the role of mortgage aggregation—where large financial institutions purchase mortgages from smaller lenders for securitization—in expanding credit supply. Using a novel dataset linking originators and aggregators, and a regulatory shock under Basel III that increased aggregators' cost of holding mortgage servicing rights (MSRs), I show that disruptions to aggregation relationships significantly reduce credit supply, particularly for low-income borrowers. The findings highlight how funding market frictions and lender specialization shape the availability and inclusivity of mortgage credit. The second essay introduces a new channel of monetary policy transmission through shadow banks: the mortgage servicing channel. In contrast to traditional banks that reply on deposit funding, shadow banks use MSRs as both collateral and a stable source of cash flow for loan origination and working capital needs. MSRs increase in value when interest rates rise, hedging shadow banks against funding shocks. Using confidential supervisory data and high-frequency monetary policy shocks, we show that shadow banks with greater MSR exposure reduce lending less during tightening cycles. The results suggest that the rising share of nonbank lenders weakens the pass-through of monetary policy to aggregate mortgage lending. The third essay examines the real estate investment of U.S. politicians. Using a new dataset of politicians' real estate transactions, we show that politicians in office earn significantly higher returns compared to average homeowners and election runners-up. These excess returns vanish after leaving office, which suggests that political tenure, rather than superior skill, drives their outperformance. Our results reveal that politicians may exploit less transparent markets through strategic timing, location choices and federal resource allocations, raising concerns about the need for enhanced disclosure.

Text

2025-07-09

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/91541

Business Administration - Finance

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/