Kim, Yeorim; Mastrogiacomo, Mauro; Hochgürtel, Stefan; … - 2022
We test whether households that face prospective home equity losses during a house price downturn use divorce to shed … lender against borrower default and transfers the risk to the public. Divorce is one of the major events that obliges the … guarantor to repay outstanding residual debt after (foreclosure) sale. We argue in this paper that divorce is endogenous to …