While numerous and varied opinions abound, there remains much confusion why so few mortgages are modified at a time when demand to modify is so high. To better understand this complex issue, we build a game theoretic model to quantify a number of economic incentives and costs surrounding various...

Using a sample of 26,892 rate quotes on home purchase loan applications, the current paper investigates interstate variation in residential mortgage interest rates. More specifically, we find posted rate quotes by lenders are directly related to measures of foreclosure process risk including the...

Using a sample of 26,892 rate quotes on home purchase loan applications, the current paper investigates interstate variation in residential mortgage interest rates. More specifically, we find posted rate quotes by lenders are directly related to measures of foreclosure process risk including the...

This study is the first to examine strategic mortgage default and financial herding on a neurological level. Using fMRI technology, we identify a number of substrates within the brain that provide a neurobiological explanation for why some homeowners exercise their mortgage put option while...

Inequity Aversion has long been applied in a game theoretic setting to explain that individuals are willing to sacrifice personal wealth in order to financially penalize players they perceive to be acting selfishly or unfairly. We apply inequity aversion to strategic mortgage default decisions...

In this study we use functional magnetic resonance imaging (fMRI) to understand how homeowners process non-financial information when considering strategic mortgage default. We find that borrowers initially attempt to inhibit their knee jerk reaction to retaliate against a lender who has engaged...