Mortgage choice, house price externalities, and the default rate
نویسندگان
چکیده
منابع مشابه
House Price Beliefs and Mortgage Leverage Choice∗
We study the effects of homebuyers’ beliefs about future house price changes on their mortgage leverage choice. We show that, from a theoretical perspective, the relationship between homebuyers’ beliefs and their leverage choice is ambiguous, and depends on the magnitude of a “collateral adjustment friction” that reduces homebuyers’ willingness to adjust their house size in response to beliefs ...
متن کاملResidential Mortgage Default
although default rates on residential mortgages have been relatively low in recent years, policymakers and economists should still be concerned about mortgage default for several reasons. First, while the foreclosure rate in the u.s. has averaged only 1 percent over the past 20 years, there have been dramatic swings in regional default rates over this period. For example, in the early 1990s for...
متن کاملHamp and the Dynamic Mortgage Default Decision
In this paper I develop and estimate a dynamic model of the household decision to default on a mortgage using data from the Homeowners Affordability Modification Program (HAMP), which reduces delinquent homeowner housing payments to 31 percent of income. I find that HAMP has prevented 550,000 defaults as of June 2013 relative to a scenario where HAMP does not exist, at a cost-per-default preven...
متن کاملHouse Prices and Subprime Mortgage
The recent sharp increase in subprime mortgage delinquencies has captured the public spotlight and led analysts to search for the factors that are likely to have contributed to the problem.These factors commonly include the lack of income documentation, high loan-to-income ratios, the lowering of credit standards, and the resets on adjustable-rate loans, to name but a few. Although these factor...
متن کاملThe Adjustable Balance Mortgage: Reducing the Value of the Put∗
We propose a new mortgage contract that endogenizes the risk of house price declines and thus minimizes default risk resulting from changes in the underlying asset value while still retaining contract rates near the cost of a standard fixed-rate mortgage. Our new mortgage recognizes that the lender is the most economically efficient bearer of house price risk. By reducing the role of the legal ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Journal of Housing Economics
سال: 2014
ISSN: 1051-1377
DOI: 10.1016/j.jhe.2014.06.001