In general, the IR functions were consistent, with UWPC serving as an effective indicator of aggregate underwriting standards.
To the extent that underwriting standards systematically rise with mortgage interest rates, the IR in Figure 10b further supports UWPC as a useful indicator of underwriting.
More intriguingly, both UWPC and IMORT tended to fall (at least for the first two years) following an upward shock to house prices.
Both responses are consistent with UWPC as an indicator of underwriting tightness.
Taken together, then, the estimated responses to the indicator of underwriting provided considerable support for the interpretation that UWPC serves as a useful indicator of mortgage underwriting tightness.