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Policy intervention in debt renegotiation: Evidence from the Home Affordable Modification Program
Agarwal, Sumit; Amromin, Gene; Ben-David, Itzhak; … - 2013
The main rationale for policy intervention in debt renegotiation is to enhance such activity when foreclosures are perceived to be inefficiently high. We examine the ability of the government to influence debt renegotiation by empirically evaluating the effects of the 2009 Home Affordable...
Persistent link: https://www.econbiz.de/10010352185
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Policy intervention in debt renegotiation : evidence from the Home Affordable Modification Program
Agarwal, Sumit; Amromin, Gene; Ben-David, Itzhak; … - 2013
The main rationale for policy intervention in debt renegotiation is to enhance such activity when foreclosures are perceived to be inefficiently high. We examine the ability of the government to influence debt renegotiation by empirically evaluating the effects of the 2009 Home Affordable...
Persistent link: https://www.econbiz.de/10010212760
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Policy Intervention in Debt Renegotiation: Evidence from the Home Affordable Modification Program
Agarwal, Sumit; Amromin, Eugene; Ben-David, Itzhak; … - Federal Reserve Bank of Chicago - 2013
The main rationale for policy intervention in debt renegotiation is to enhance such activity when foreclosures are perceived to be inefficiently high. We examine the ability of the government to influence debt renegotiation by empirically evaluating the effects of the 2009 Home Affordable...
Persistent link: https://www.econbiz.de/10011027197
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Second liens and the holdup problem in mortgage renegotiation
Agarwal, Sumit; Amromin, Gene; Ben-David, Itzhak; … - 2014
When borrowers are delinquent, senior debtholders prefer liquidation whereas junior debtholders prefer to maintain their option value by delaying resolution or modifying the loan. In the mortgage market, a conflict of interest (“holdup”) arises when servicers of securitized senior liens are...
Persistent link: https://www.econbiz.de/10010353293
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Collateral Valuation and Borrower Financial Constraints : Evidence from the Residential Real Estate Market
Agarwal, Sumit - 2014
Financially constrained borrowers have the incentive to influence the appraisal process in order to increase borrowing or reduce the interest rate. We document that the average valuation bias for residential refinance transactions is above 5%. The bias is larger for highly leveraged...
Persistent link: https://www.econbiz.de/10013065882
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Collateral Valuation and Borrower Financial Constraints : Evidence from the Residential Real Estate Market
Agarwal, Sumit - 2013
Financially constrained borrowers have the incentive to influence the appraisal process in order to increase borrowing or reduce the interest rate. We document that the average valuation bias for residential refinance transactions is above 5%. The bias is larger for highly leveraged...
Persistent link: https://www.econbiz.de/10013071769
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Collateral Pledge, Sunk-Cost Fallacy and Mortgage Default
Agarwal, Sumit - 2014
Individuals and firms pledge collateral to mitigate agency costs or contracting frictions in a world with asymmetric … firms and individuals should default on their debt contract irrespective of the initial collateral pledged. In this paper …, we estimate default models and find that after controlling for mark-to-market asset valuation, initial collateral remains …
Persistent link: https://www.econbiz.de/10013052915
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Collateral Shock and Access to Credit : Evidence from Loan Application Data
Agarwal, Sumit; Ghosh, Pulak; Kang, Weida; li, you; … - 2022
liquidate collateral affect non-mortgage credit provision in the context of personal loan application. The housing policy …-in-differences estimation and is not driven by changes in local credit demand. Improved collateral liquidity is the key channel driving the …
Persistent link: https://www.econbiz.de/10013403669
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Rationality in the Consumer Credit Market : Choosing between Alternative and Mainstream Credit
Agarwal, Sumit - 2017
In this paper we study whether consumers optimally choose between formal and informal credit, using a unique panel dataset with all registered information available on consumers' behavior within the Swedish alternative and mainstream credit markets. Specifically, we analyze to what extent credit...
Persistent link: https://www.econbiz.de/10012975530
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Familiarity Breeds Contagion
Agarwal, Sumit - 2020
Although the impact of social ties on credit markets has been studied, the possibility of contagion through social ties remains unexplored. Examining the Indian caste system and the group loan structure, we find that social ties could turn shocks into a contagion within credit markets: a drought...
Persistent link: https://www.econbiz.de/10012845395