The Rise of Nonbanks in Servicing Household Debt – Manisha Padi (UC Berkeley)

About this episode

Prof. Manisha Padi discusses the impact of nonbanks on household debt servicing and the implications of Basel III regulation.

In this episode of the CLE Vlog & Podcast Series, Prof. Manisha Padi (University of California, Berkeley) discusses her study "The Rise of Nonbanks in Servicing Household Debt" with Karol Rutkowski (ETH Zurich). In their work, Padi and co-authors study the effects of capital regulation focusing on the case of the market for mortgage servicing rights (MSRs) and the Basel III regulation. Using a theoretical model and U.S. credit registry data, the authors analyze the shift in servicing riskier mortgages from banks towards non-bank servicers triggered by Basel III. Their analysis shows the tension between reducing agency conflicts and enhancing investor welfare on one side, and the borrowers' welfare on the other. Paper Reference: The Rise of Nonbanks in Servicing Household Debt Olin Business School Center for Finance & Accounting Research Paper No. 2023/08 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4550175 Naser Hamdi – Equifax, Inc. Erica Xuewei Jiang – University of Southern California Brittany Almquist Lewis – Washington University in Saint Louis & Indiana University Manisha Padi – University of California, Berkeley Avantika Pal – Washington…

People in this episode

Guest: Manisha Padi

Topics covered

• nonbanks
• household debt
• mortgage servicing
• capital regulation
• Basel III

Keywords

• mortgage servicing rights
• servicing risk
• agency conflicts
• investor welfare
• borrowers' welfare

Mentioned in this episode

Products: Basel III

Books & works: The Rise of Nonbanks in Servicing Household Debt

Places: U.S.

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