1989
DOI: 10.1016/0166-0462(89)90009-4
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Second mortgages and household saving

Abstract: Second mortgages accounted for 10.8% of the stock of outstanding mortgage debt at the end of 1987, up from 3.6% at the beginning of the 198Os.This paper investigates the determinants of second mortgage borrowing and the characteristics of second mortgage borrowers. We first calculate the outstanding stock of home equity that remains to be borrowed against on tax-preferred terms, recognizing the limits on interest deductions in the 1986Tax Reform Act and the 1987 Omnibus Budget Reconciliation Act.Despite these … Show more

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Cited by 81 publications
(15 citation statements)
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“…Forecasts based on Poterba (1989Poterba ( ) for 1987 a from Feldatein, Dicks-Mireaux and Poterba (1983).…”
Section: Discussionmentioning
confidence: 99%
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“…Forecasts based on Poterba (1989Poterba ( ) for 1987 a from Feldatein, Dicks-Mireaux and Poterba (1983).…”
Section: Discussionmentioning
confidence: 99%
“…Thus, it appears that there was significant substitution from 27 Of course, the individual must also hold enough home equity to secure the necary mortgage debt. Manchester and Poterba (1989) estimate that there was a potential stock of $2.5 trillion in unused mortgage borrowing in 1985, and that if the $100,000 limit on tax-deductible second mortgage debt had been in place only 10.5% of homeowners would have been constrained. 28 "Net" debt does not include debt used to finance portfolio investments, since interest on this debt is still deductible.…”
Section: New Issues Raised By the Tax Reform Act Of 1986mentioning
confidence: 99%
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“…2 Throughout this paper, the terms self-employed, business owner, and proprietor are employed interchangeably. 3 See Manchester and Poterba (1989) and Kotlikoff (1990). Engen et al (1996) show that contributors have significantly more non-mortgage debt (other than business debt) than non-contributors.…”
Section: Introductionmentioning
confidence: 99%