One third of U.S. mortgages are originated by small correspondent lenders and then aggregated and securitized by large aggregators. Despite the considerable size and importance of aggregators in channelling funding to the housing market, our understanding of this market remains limited. I construct a novel dataset on correspondent lender-aggregator relationships to study the causal effect of mortgage aggregation on credit supply. Exploiting the U.S. implementation of Basel III as a negative shock to aggregation, I find a significant impact on credit supply, especially to low-income borrowers. Matching frictions in the aggregation market contribute to the overall credit supply decline, while aggregators' optimal portfolio reallocation and correspondent lenders' specialization across demographic groups drive the unequal impact on low-income borrowers. My results highlight the important role of mortgage aggregation in reducing securitization frictions and expanding credit access.

We propose a new conceptual framework for monetary policy transmission through shadow banks in the mortgage market that highlights the role of mortgage servicing in generating non-deposit funds for lending. We document that mortgage servicing acts as a natural hedge against interest rate shocks and dampens the effect of monetary policy on shadow bank mortgage lending. Higher interest rates reduce prepayment risk, increasing the collateral value of mortgage servicing assets and cashflow from servicing income. This enables shadow banks with greater exposure to mortgage servicing to obtain more funding. The mortgage servicing channel is weaker for traditional banks due to their reliance on deposit funding and the capital charge on mortgage servicing assets. Our estimates imply that the rising share of shadow banks in mortgage servicing has weakened the pass-through of monetary policy to aggregate mortgage lending.

Using a newly constructed dataset of US politicians' real estate transactions, we show that between 1994 and 2017, politicians in office outperformed average home-owners and election runners-up by over 3 percentage points -- a stark contrast to their performance in equity markets. This advantage, which disappears after leaving office, suggests that political tenure -- not superior skill -- drives their outperformance. Our findings illustrate how, even in systems with strong electoral accountability, politicians may exploit less transparent markets through strategic timing, location choices, and federal resource allocations. These results underscore the need for greater transparency to safeguard public trust in democratic institutions.

We investigate the impact of nonbank expansion in the mortgage market on bank’s lending portfolios. Employing a difference-in-differences approach based on regulatory changes that reduce nonbank lending costs, we find: 1) Nonbank expansion decreases bank mortgage market share amid no changes in total mortgage lending. 2) Diversified banks increase credit supply and offer lower rates to small business lending in counties with more nonbank expansion. 3) Within bank and county credit reallocation increases local small business entry and employment in the tradable sector. We develop a conceptual framework to show frictions in cross-county capital allocation drive the results. Our results highlight the distributional consequences of nonbank expansion in the small business lending market.