We find that it helps explain the variation of this growth across regions, in particular the growth of more discretionary acquisitions. The growth predicted by this benefit is on top of the acquisition growth caused by the exit of private-label securitizers. We conclude that the GSEs actively targeted their acquisitions to combat home-price declines.

Working Paper
Concentration in Mortgage Markets: GSE Exposure and Risk-Taking in Uncertain Times
December 2020
WP 20-04R - When home prices threaten to decline, large mortgage investors can benefit from fostering new lending that boosts demand. We ask whether this benefit contributed to the growth in acquisitions of risky mortgages by the government-sponsored enterprises (GSEs) in the first half of 2007.
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