Mortgages and private provision of guarantees to the

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mortgages, and private provision of guarantees to the low quality mortgages must be reasonably competitive and well capitalized at all times lest new too-big-too-fail firms are created. The temptation to opt for cheap housing credit is as irresistible for low-income households as it is for the government. However, it has proven woefully inadequate as a social policy tool to fight the increasing income inequality and redistributed wealth towards the rich. Ultimately, any policy that is not aimed directly at promoting economic growth by and large makes things worse. Government support of housing markets and institutions is a case in point.
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139 Glossary ABCP: asset-backed commercial paper AIG: American International Group Alt-A: alternative to agency (mortgage) ARM: adjustable-rate mortgage BNY: Bank of New York Mellon CBO: Congressional Budget Office CDO: collateralized debt obligation CDS: credit default swap CEO: chief executive officer CFPB: Consumer Finance Protection Bureau CLTV: combined loan-to-value ratio CMO: collateralized mortgage obligation DTI: debt-to-income ratio FDIC: Federal Deposit Insurance Corporation FHA: Federal Housing Administration FHEFSSA : Federal Housing Enterprises Financial Safety and Soundness Act FHFA: Federal Housing Finance Agency FHLB: Federal Home Loan Banks FHLMC: Federal Home Loan Mortgage Corporation, a.k.a. Freddie Mac FICO: Fair-Isaac Corporation (credit score) FIRREA: Financial Institutions Reform, Recovery, and Enforcement Act FNMA: Federal National Mortgage Association, a.k.a. Fannie Mae FRA: Federal Reserve Act FRM: fixed-rate mortgage FSLIC: Federal Savings and Loan Insurance Corporation GDP: gross domestic product GMRIC: Government Mortgage Risk Insurance Corporation GNMA: Government National Mortgage Association, a.k.a. Ginnie Mae GSE: Government-sponsored enterprise HAMP: Home Affordable Modification Program HELOC: home equity line of credit HERA: Housing and Economic Recovery Act
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140 HOLA: Home Owners Loan Act HUD: Department of Housing and Urban Development LC: letter of credit LCFI: large complex financial institution LOLR: lender of last resort LTCM: Long-Term Capital Management LTV: loan-to-value ratio; see also CLTV MBS: mortgage-backed securities MCGE: mortgage credit guarantor entity NHA: National Housing Act NINJA: no income, no job, and no assets (mortgage) NY Fed: Federal Reserve Bank of New York NYSE: New York Stock Exchange OFHEO: Office of Federal Housing Enterprise Oversight OTC: over-the-counter (derivatives market) PDCF: Primary Dealer Credit Facility PPIP: Public-Private Investment Program PLS: private-label (mortgage-backed) securities RTC: Resolution Trust Corporation S&L: savings and loan (institution) SIV: special investment vehicle SPV: special purpose vehicle TALF: Term Auction Lending Facility TARP: Troubled Asset Relief Program TRIA: Terrorism Risk Insurance Act TSLF: Term Securities Lending Facility
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