Clauretie, Terrence M.; Jameson, Mel - In: Journal of Real Estate Research 10 (1995) 2, pp. 153-162
If loan renegotiations are not uncommon, this alternative should be modeled into the contingent claims framework of mortgage pricing. There is no direct evidence on the frequency of loan renegotiation, however. A simple model of default indicates that renegotiation should occur more frequently...