This paper presents evidence that affiliation between the mortgage servicer and the originator provides a mechanism to reduce information frictions inherent in debt renegotiation. We find that originator-servicer affiliation increases the likelihood of modification by 10%-23T using a large...

We present evidence that affiliation between the debt renegotiator and the originator represents a mechanism to reduce asymmetric information inherent in debt renegotiation. We hypothesize that affiliation affords servicers lower-cost access to borrower information, thus improving their ability...