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Macroeconomic-Driven Prepayment Risk and the Valuation of Mortgage-Backed Securities

Chernov, Mikhail - 2016

We introduce a reduced-form modeling framework for mortgage-backed securities in which we solve for the implied … actual prepayments, providing direct evidence of significant prepayment risk premia in mortgage-backed security prices. We … risk. We also find evidence that mortgage-backed security prices were significantly affected by Fannie Mae credit risk and …

Persistent link: https://www.econbiz.de/10012456578

Shale Shocked : Cash Windfalls and Household Debt Repayment

Cookson, J. Anthony - 2020

How do persistent cash flow shocks affect debt repayment across the distribution of households? Using individual data on natural gas shale royalty payments matched with credit bureau data for 215,639 consumers, we estimate that individuals repay 33 cents of debt per dollar of windfall, and that...

Persistent link: https://www.econbiz.de/10012481085

Household Debt and Defaults from 2000 to 2010 : Facts from Credit Bureau Data

Mian, Atif - 2015

We use individual level credit bureau data to document which individuals saw the biggest rise in household debt from 2000 to 2007 and the biggest rise in defaults from 2007 to 2010. Growth in household debt from 2000 to 2007 was substantially larger for individuals with the lowest initial credit...

Persistent link: https://www.econbiz.de/10012457464

Student Loans and Repayment : Theory, Evidence and Policy

Lochner, Lance - 2015

Rising costs of and returns to college have led to sizeable increases in the demand for student loans in many countries. In the U.S., student loan default rates have also risen for recent cohorts as labor market uncertainty and debt levels have increased. We discuss these trends as well as...

Persistent link: https://www.econbiz.de/10012457817

How Do Americans Repay Their Debt? The Balance-Matching Heuristic

Gathergood, John - 2019

In Gathergood et al. (2019), we studied credit card repayments using linked data on multiple cards from the United Kingdom. We showed that individuals did not allocate payments to the higher interest rate card, which would minimize the cost of borrowing, but instead made repayments according to...

Persistent link: https://www.econbiz.de/10012479511

How Do Individuals Repay Their Debt? The Balance-Matching Heuristic

Gathergood, John - 2017

We study how individuals repay their debt using linked data on multiple credit cards from five major issuers. We find that individuals do not allocate repayments to the higher interest rate card, which would minimize the cost of borrowing. Instead, individuals allocate repayments using a...

Persistent link: https://www.econbiz.de/10012453552

How Do Income-Driven Repayment Plans Benefit Student Debt Borrowers?

Catherine, Sylvain; Ebrahimian, Mehran; Yannelis, … - National Bureau of Economic Research - 2024

The rapid rise in student loan balances has raised concerns among economists and policymakers. Using administrative credit bureau data, we find that nearly half of the increase in balances from 2010 to 2020 is due to deferred payments, largely driven by the expansion of income-driven repayment...

Persistent link: https://www.econbiz.de/10015094901

Improving Household Debt Management with Robo-Advice

Chak, Ida; Croxson, Karen; D'Acunto, Francesco; Reuter, … - National Bureau of Economic Research - 2022

Poor debt-management skills lower financial security and wealth accumulation. Because optimal solutions to credit repayment problems depend on neither risk preferences nor beliefs, loan repayment is a prime application for robo-advising. Vulnerable households, though, tend to distrust new...

Persistent link: https://www.econbiz.de/10013462665

Debt Moratoria : Evidence from Student Loan Forbearance

Dinerstein, Michael; Yannelis, Constantine; Chen, Ching-Tse - National Bureau of Economic Research - 2023

We evaluate the effects of the 2020 student debt moratorium that paused payments for student loan borrowers. Using administrative credit panel data, we show that the payment pause led to a sharp drop in student loan payments and delinquencies for borrowers subject to the debt moratorium, as well...

Persistent link: https://www.econbiz.de/10014287348

The Effect of Housing on Portfolio Choice

Chetty, Raj - 2010

divergence between the theory and data. First, it is critical to distinguish between home equity wealth and mortgage debt, as … mortgage debt that is orthogonal to unobserved determinants of portfolios. We estimate a model that permits home equity and … mortgage debt to have different effects on portfolio shares. We isolate plausibly exogenous variation in home equity and …

Persistent link: https://www.econbiz.de/10012462655