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House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis

Mian, Atif R. - 2009

Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the sharp rise in U.S. household leverage from 2002 to 2006 and the increase in...

Persistent link: https://www.econbiz.de/10012463368

An IV Hazard Model of Loan Default with an Application to Subprime Mortgage Cohorts

Palmer, Christopher J. - National Bureau of Economic Research - 2023

asymptotically normal. Applying my estimator to the subprime mortgage crisis, I quantify what caused the foreclosure rate to triple … standards, with a 10% decline in home prices increasing subprime mortgage default rates by 50% …

Persistent link: https://www.econbiz.de/10014447321

Moral and Social Constraints to Strategic Default on Mortgages

Guiso, Luigi - 2009

We use survey data to study American households' propensity to default when the value of their mortgage exceeds the … value of their house even if they can afford to pay their mortgage (strategic default). We find that 26% of the existing … the house. Yet, 17% of households would default, even if they can afford to pay their mortgage, when the equity shortfall …

Persistent link: https://www.econbiz.de/10012463505

The Role of Proximity in Foreclosure Externalities : Evidence from Condominiums

Fisher, Lynn M. - 2014

We measure the effect of foreclosures on the sale prices of nearby properties using a dataset of condominiums in Boston. A foreclosure in the same association and at the same address depresses the sale price by 2.5 percent, but properties in the same association but located at a different...

Persistent link: https://www.econbiz.de/10012458584

Optimal Mortgage Refinancing with Inattention

Berger, David; Milbradt, Konstantin; Tourre, Fabrice; … - National Bureau of Economic Research - 2024

We build a model of optimal fixed-rate mortgage refinancing with fixed costs and inattention and derive a new …

Persistent link: https://www.econbiz.de/10014544725

Repairing a Mortgage Crisis : HOLC Lending and its Impact on Local Housing Markets

Courtemanche, Charles - 2010

increased 1940 median home values and homeownership rates, but not new home building …

Persistent link: https://www.econbiz.de/10012462410

Liquidity Constraints and Housing Prices : Theory and Evidence from the VA Mortgage

Vigdor, Jacob L. - 2004

mortgage credit in the postwar era, supports the model. The results suggest that more recent mortgage market innovations have …

Persistent link: https://www.econbiz.de/10012468080

Moral Hazard in Home Equity Conversion

Shiller, Robert J. - 1998

Home equity conversion as presently constituted or proposed usually does not deal well with the potential problem of moral hazard. Once home-owners know that the risk of poor market performance of their homes is borne by investors, they have an incentive to neglect to take steps to maintain the...

Persistent link: https://www.econbiz.de/10012472256

Home Equity Insurance

Shiller, Robert J. - 1994

Home equity insurance policies, policies insuring homeowners against declines in the price of their homes, would bear some resemblance both to ordinary insurance and to financial hedging vehicles. A menu of choices for the design of such policies is presented here, and conceptual issues are...

Persistent link: https://www.econbiz.de/10012474085

Optimal Monetary Policy with Collateralized Household Debt and Borrowing Constraints

Monacelli, Tommaso - 2006

We study optimal monetary policy in an economy with nominal private debt, borrowing constraints and price rigidity. Private debt reflects equilibrium trade between an impatient borrower, who faces an endogenous collateral constraint, and a patient saver, who engages in consumption smoothing....

Persistent link: https://www.econbiz.de/10012466194

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