Many struggling mortgage borrowers who have home equity lose it through foreclosure. To explainwhy they do not just sell their homes instead, this paper develops a new model of mortgage default in which homeowners face psychic moving costs. A transparent calibration procedure yields psychic...

Why do homeowners default on mortgages? This paper studies the question using a survey specifically designed for the purpose, with a sample drawn from (and matched to) very rich administrative data. I find that a wide variety of typically-unobserved liquidity shocks together trigger nearly all...

Borrowers with subprime auto loans typically pay high interest rates and frequently default on their loans. Interest payments could compensate lenders for borrowers’ default risk, and so the high interest rates paid by borrowers with subprime loans could be explained by their higher default...

This paper studies the intermediation of auto loans through auto dealers using new and comprehensive administrative data. The arrangements between auto dealers and lenders incentivize dealers to increase loan prices. We leverage details of the corresponding contracts to demonstrate that many...

This third COVID-19 Special Issue Brief explores the characteristics, including demographics, of mortgage borrowers in forbearance or delinquent during the COVID-19 pandemic. The report uses data from the National Mortgage Database (NMDB®), which is a random 1-in-20 sample of closed-end...

This paper studies the intermediation of auto loans through auto dealers using new and comprehensive data. Lenders give auto dealers discretion to price loans. The first part of our project leverages details of the contracts between lenders and dealers to demonstrate that many consumers are...

This paper studies the intermediation of auto loans through auto dealers using new and comprehensive administrative data. The arrangements between auto dealers and lenders incentivize dealers to increase loan prices. We leverage details of the corresponding contracts to demonstrate that many...