This paper quantitatively accounts for the cyclical dynamics of key macroeconomic housing and mortgage market variables … using a tractable, searchtheoretic model of housing with equilibrium mortgage default. To explain these dynamics, the model …, the reverse occurs. Based on these insights, I consider a foreclosure reform that makes all mortgages full recourse, and I …

Mortgages are prime examples of long-term nominal loans. As a result, under incomplete asset markets, monetary policy … can affect household decisions through the cost of new mortgage borrowing and the value of payments on outstanding debt …, have larger real effects than transitory shocks. The transmission is stronger under adjustable- than fixed-rate mortgages …

levels through the mortgage interest rate, which enables the central bank to reduce large fluctuations and bubble tendencies …

policies. Heterogeneous households have access to mortgages and unsecured credit and can default separately on both types of …

data from a major Danish bank. We examine the behavior of borrowers with adjustable rate mortgages, and exploit that the … bank sends a letter before the annual reset containing advance information on the expected change in mortgage payments. We …