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Unemployment, negative equity, and strategic default
Gerardi, Kristopher; Herkenhoff, Kyle Frederic; … - Federal Reserve Bank of Atlanta - 2013
defaulters have both negative equity and enough liquid or illiquid assets to make one month's mortgage payment. This finding …
Persistent link: https://www.econbiz.de/10010739541
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Homeownership and Entrepreneurship: The Role of Mortgage Debt and Commitment
Bracke, Philippe; Hilber, Christian; Silva, Olmo - CESifo - 2014
We study the link between homeownership, mortgage debt, and entrepreneurship using a model of occupational choice and … housing tenure where homeowners commit to mortgage payments. Our model predicts that, as long as mortgage rates exceed the … rate of interest on liquid wealth: (i) mortgage debt, by amplifying risk aversion, diminishes the likelihood that …
Persistent link: https://www.econbiz.de/10010948829
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Homeownerhip and Entrepreneurship
Bracke, Philippe; Hilber, Christian; Silva, Olmo - Spatial Economics Research Centre, LSE - 2012
We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British … after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing …
Persistent link: https://www.econbiz.de/10010543484
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Homeownership and Entrepreneurship: The Role of Commitment and Mortgage Debt
Bracke, Philippe; Hilber, Christian; Silva, Olmo - Institute for the Study of Labor (IZA) - 2013
We study the link between homeownership and entrepreneurship using a model of occupational choice and housing tenure … where homeowners commit a fixed budget to mortgage payments. Our model predicts that: (i) mortgage commitments, by … amplifying risk aversion, diminish the likelihood that homeowners start a business; (ii) the negative link between homeownership …
Persistent link: https://www.econbiz.de/10010665153
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Consumer Credit: Too Much or Too Little (or Just Right)?
Zinman, Jonathan - National Bureau of Economic Research (NBER) - 2013
The intersection of research and policy on consumer credit often has a Goldilocks feel. Some researchers and policymakers posit that consumer credit markets produce too much credit. Other researchers and policymakers posit that markets produce too little credit. I review theories and evidence on...
Persistent link: https://www.econbiz.de/10010951083
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Household Debt: Facts, Puzzles, Theories, and Policies
Zinman, Jonathan - National Bureau of Economic Research (NBER) - 2014
Borrowing decisions affect most households, with large stakes and implications for subfields as varied as macroeconomics and industrial organization. I review theoretical and empirical work on household debt: its prevalence, level, growth, and composition, as well as various measures of consumer...
Persistent link: https://www.econbiz.de/10010951247
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The owner-occupiers’ capital structure during a house price boom
Lunde, Jens - Copenhagen Business School - 2006
House and flat prices have been through a tremendous bust and boom cycle in Denmark. From 1986 to 1993 real prices for houses and flats dropped by one third on average, foreclosures accounted for around 1/6 of the house and flat turnovers in numbers, and in reality the market for owner-occupied...
Persistent link: https://www.econbiz.de/10005190508
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Collateral Valuation and Borrower Financial Constraints: Evidence from the Residential Real Estate Market
Agarwal, Sumit; Ben-David, Itzhak; Yao, Vincent - National Bureau of Economic Research (NBER) - 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/10010703331
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Continuous Workout Mortgages
Shiller, Robert J.; Wojakowski, Rafal M.; Ebrahim, M. Shahid - Cowles Foundation for Research in Economics, Yale University - 2011
) explicit modelling of repayment and interest-only CWMs; (b) closed form formulae for mortgage payment and mortgage balance of a … repayment CWM; (c) a closed form formula for the actuarially fair mortgage rate of an interest-only CWM. For repayment CWMs we …
Persistent link: https://www.econbiz.de/10009001016
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The Inefficiency of Refinancing: Why Prepayment Penalties Are Good for Risky Borrowers
Mayer, Christopher; Piskorski, Tomasz; Tchistyi, Alexei - National Bureau of Economic Research (NBER) - 2010
This paper explores the practice of mortgage refinancing in a dynamic competitive lending model with risky borrowers … prevents the mortgage pools from becoming disproportionately composed of the riskiest borrowers over time. Mortgages with … prepayment penalties allow lenders to lower mortgage rates and extend credit to the least creditworthy, with the largest benefits …
Persistent link: https://www.econbiz.de/10008756452