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Credit, bankruptcy, and aggregate fluctuations

Nakajima, Makoto; Ríos-Rull, José-Víctor - 2019

access to unsecured credit (because of bankruptcy costs) and aggregate shocks, we show that the cyclical behavior of … credit match the sizes of credit and bankruptcy volatilities. We also find that when the right to file for bankruptcy does …

Persistent link: https://www.econbiz.de/10012197797

Do Student Loan Borrowers Opportunistically Default? Evidence from Bankruptcy Reform

Darolia, Rajeev - 2016

Bankruptcy reform in 2005 eliminated debtors' ability to discharge private student loan debt in bankruptcy. This law … bankruptcy even if they had sufficient income to service their debt. Using a unique, nationally representative sample of … anonymized credit bureau files, we examine the bankruptcy filing and delinquency rates of private student loan borrowers in …

Persistent link: https://www.econbiz.de/10013004942

Should Defaults Be Forgotten? Evidence from Variation in Removal of Negative Consumer Credit Information

Bos, Marieke - 2014

Practically all industrialized economies restrict the length of time that credit bureaus can retain borrowers' negative credit information. There is, however, a large variation in the permitted retention times across countries. By exploiting a quasi-experimental variation in this retention time,...

Persistent link: https://www.econbiz.de/10013048956

Securitization and Mortgage Default

Elul, Ronel - 2015

We find that private-securitized loans perform worse than observably similar, nonsecuritized loans, which provides evidence for adverse selection. The effect of securitization is strongest for prime mortgages, which have not been studied widely in the previous literature and particular prime...

Persistent link: https://www.econbiz.de/10013025122

Reducing Strategic Default in a Financial Crisis

Agarwal, Sumit; Mikhed, Vyacheslav; Scholnick, Barry; … - 2021

We document that increasing penalties for default reduces strategic default in financial crises by exploiting the 2009 changes to Canadian consumer insolvency regulations. Our novelty is that the incentives from increasing penalties for default operate in the opposite direction from incentives...

Persistent link: https://www.econbiz.de/10013321871

Mortgage loss severities : what keeps them so high?

An, Xudong; Cordell, Larry - 2019

Mortgage loss-given-default (LGD) increased significantly when house prices plummeted and delinquencies rose during the financial crisis, but it has remained over 40 percent in recent years despite a strong housing recovery. Our results indicate that the sustained high LGDs post-crisis are due...

Persistent link: https://www.econbiz.de/10012058913

Redefault risk in the aftermath of the mortgage cisis : why did modifications improve more than self-cures?

Calem, Paul Seth; Jagtiani, Julapa; Maingi, Raman Quinn - 2018

This paper examines changes in the redefault rate of mortgages that were selected for modification during 2008-2011, compared with that of similarly situated self-cured mortgages. We find a large decline in the redefault rate of both modified and self-cured mortgages over this period, but the...

Persistent link: https://www.econbiz.de/10011971144

Appraising home purchase appraisals

Calem, Paul Seth; Lambie-Hanson, Lauren; Nakamura, … - 2018

Home appraisals are produced for millions of residential mortgage transactions each year, but appraised values are rarely below the purchase contract price: Some 30% of appraisals in our sample are exactly at the home price (with less than 10% of them below it). We lay out a basic theoretical...

Persistent link: https://www.econbiz.de/10011971156

Securitization and Mortgage Default

Elul, Ronel - 2019

The academic literature, the popular press, and policymakers have all debated securitization's contribution to the poor performance of mortgages originated in the run-up to the recent crisis. Theoretical arguments have been advanced on both sides, but the lack of suitable data has made it...

Persistent link: https://www.econbiz.de/10014203112

Consumer Bankruptcy, Mortgage Default and Labor Supply

Li, Wenli; Meghir, Costas; Oswald, Florian - 2022

individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic … Bankruptcy policy …

Persistent link: https://www.econbiz.de/10013492266