(including unsecured debt, liquid assets, and illiquid assets) play in default decisions. In sharp contrast to prior studies that … strongest predictor of default. We find that individual unemployment increases the probability of default by 5 - 13 percentage … points, ceteris paribus, compared with the sample average default rate of 3.9 percent. We also find that only 13.9 percent of …

“ruthless default,” analysis of detailed mortgage and house price data indicates that borrowers do not walk away until they are …From 2007 to 2009 U.S. house prices plunged and mortgage defaults surged. While ostensibly consistent with widespread …. Borrower reluctance to walk away implies that the moral hazard cost of default as a form of social insurance may be lower than …