Prior to the subprime crisis, mortgage brokers originated about 65% of all subprime mortgages. Yet little is known …

We use a novel approach to calculate individual “financial literacy score” for a large set of California mortgage … borrowers and then investigate the relation between financial literacy and mortgage outcomes. We find borrowers with low … are more likely to default. Our estimates show that financial literacy is economically significant where mortgage outcomes …

Leading economists and other housing market researchers examine key elements of the mortgage meltdown in this volume of …