scholarly journals How Much Are Borrowers Willing to Pay to Remove Uncertainty Surrounding Mortgage Defaults?

2021 ◽  
Author(s):  
Jackson T. Anderson ◽  
Scott Gibson ◽  
Kimberly F. Luchtenberg ◽  
Michael J. Seiler
Keyword(s):  
Mortgage Defaults

Did Bankruptcy Reform Cause Mortgage Defaults to Rise?

2011 ◽  
Vol 3 (4) ◽  
pp. 123-147 ◽  
Author(s):  
Wenli Li ◽  
Michelle J White ◽  
Ning Zhu
Keyword(s):  
Financial Crisis ◽  
Financial Distress ◽  
Budget Constraints ◽  
Mortgage Default ◽  
Subprime Mortgage ◽  
Default Rates ◽  
Mortgage Defaults

Homeowners in financial distress can use bankruptcy to avoid defaulting on their mortgages, since filing loosens their budget constraints. But the 2005 bankruptcy reform made bankruptcy less favorable to homeowners and therefore caused mortgage defaults to rise. We test this relationship and find that the reform caused prime and subprime mortgage default rates to rise by 23% and 14%, respectively. Default rates rose even more for homeowners who were particularly negatively affected by the reform. We calculate that bankruptcy reform caused mortgage default rates to rise by one percentage point even before the start of the financial crisis. (JEL D14, G01, G21, K35)

Mortgage defaults

2015 ◽  
Vol 76 ◽  
pp. 173-190 ◽  
Author(s):  
Juan Carlos Hatchondo ◽  
Leonardo Martinez ◽  
Juan M. Sánchez
Keyword(s):  
Mortgage Defaults

Recourse and (Strategic) Mortgage Defaults: Evidence from Changes in Housing Market Laws

2021 ◽  
Author(s):  
Alin Marius Andries ◽  
Anca Copaciu ◽  
Radu Popa ◽  
Razvan Vlahu
Keyword(s):  
Housing Market ◽  
Mortgage Defaults

Forecasting mortgage defaults: evidence from UK portfolio-level data

2015 ◽  
Vol 5 (2) ◽  
pp. 199
Author(s):  
Alexios Makropoulos ◽  
Anastasios Savvopoulos ◽  
Peter L. Jones
Keyword(s):  
Level Data ◽  
Mortgage Defaults

Mortgage Defaults

2012 ◽  
Author(s):  
Juan Carlos Hatchondo ◽  
Leonardo Martinez ◽  
Juan M. Sanchez
Keyword(s):  
Mortgage Defaults

Default Option Exercise over the Financial Crisis and beyond*

2020 ◽  
Author(s):  
Xudong An ◽  
Yongheng Deng ◽  
Stuart A Gabriel
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Financial Crisis ◽  
Panel Data Analysis ◽  
Mortgage Default ◽  
Time Varying ◽  
Crisis Period ◽  
Default Option ◽  
Run Up ◽  
Mortgage Defaults

Abstract We document changes in borrowers’ sensitivity to negative equity and show heightened borrower default propensity as a fundamental driver of crisis period mortgage defaults. Estimates of a time-varying coefficient competing risk hazard model reveal a marked run-up in the default option beta from 0.2 during 2003–06 to about 1.5 during 2012–13. Simulation of 2006 vintage loan performance shows that the marked upturn in the default option beta resulted in a doubling of mortgage default incidence. Panel data analysis indicates that much of the variation in default option exercise is associated with the local business cycle and consumer distress. Results also indicate elevated default propensities in sand states and among borrowers seeking a crisis-period Home Affordable Modification Program loan modification.

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