IDEAS home Printed from https://ideas.repec.org/a/wly/jmoncb/v58y2026i2p471-495.html

Nonconforming Preferences: Jumbo Mortgage Lending and Large Bank Stress Tests

Author

Listed:
  • ANDREW HAUGHWOUT
  • DONALD MORGAN
  • MICHAEL NEUBAUER
  • MAXIM PINKOVSKIY
  • WILBERT VAN DER KLAAUW

Abstract

We document a substantial shift toward nonconforming (“jumbo”) mortgage lending by banks subject to Comprehensive Capital Analysis and Review (CCAR) stress tests. Using two measures of this jumbo shift and difference‐in‐difference analysis, we show that jumbos as a share of all mortgage originations by CCAR banks rose and that their originations were less “bunched” just below the conforming loan limit. We explore several potential mechanisms that might explain CCAR banks' increased preference for jumbo with varying degrees of support. Our evidence is most consistent with the hypothesis that CCAR banks were attracted to the relatively lower credit risk of jumbo mortgages.

Suggested Citation

  • Andrew Haughwout & Donald Morgan & Michael Neubauer & Maxim Pinkovskiy & Wilbert Van Der Klaauw, 2026. "Nonconforming Preferences: Jumbo Mortgage Lending and Large Bank Stress Tests," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 58(2), pages 471-495, March.
    • Handle: RePEc:wly:jmoncb:v:58:y:2026:i:2:p:471-495
    DOI: 10.1111/jmcb.13205
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jmcb.13205
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jmcb.13205?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jmoncb:v:58:y:2026:i:2:p:471-495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.