individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks …

This study proposes a lifetime utility maximization model, where borrowers choose optimal mortgage bundles including … mortgage type, LTV and loan size to maximize their allocation of limited budgets between housing and non-housing consumptions …. The model predicts that the mortgage bundles choice by borrowers of different income and risk attributes explains …

We explore the impact of mortgage securitization on the international diversification of macroeconomic risk. By making … mortgage-related risks internationally tradeable, securitization contributes considerably to better international consumption … risk sharing: we find that countries with the most highly developed markets for securitized mortgage debt have consumption …