borrowers' default rates on mortgages and nonmortgage debts by about 40 percent and 25 percent, respectively. Refinancing also …We use quasi-random access to the Home Affordable Refinance Program (HARP) to identify the causal effect of refinancing … a mortgage on borrower balance sheet outcomes. We find that on average, refinancing into a lower-rate mortgage reduced …

We are the first to provide closed-form analytic solutions for the joint problem of mortgage refinancing and default … consistent with empirical works on mortgage default. Although our refinancing results are comparable to other closed …. Our solution takes into account reduction in mortgage interest rates and the "cash-out" motive for refinancing. The model …

A standard, no-recourse mortgage contract does not adjust when the value of the underlying collateral falls …. Consequently, shocks that lower house prices may trigger one of the necessary conditions for default: negative equity. A common … alternative contract attempts to prevent default by imposing full-recourse. This may cause individuals who believe they are likely …