homeowner only once the loan is repaid. By effectively reducing the LTV of the mortgage, it increases the homeowner's incentives …

rigidities. We use data for the period 1981-2006 to estimate our model using Bayesian techniques. We analyze how an increase in … risk in the mortgage market raises the default rate and spreads to the rest of the economy, creating a recession. In our … model two shocks are well suited to replicate the subprime crisis and the Great Recession: the mortgage risk shock and the …

. Filing under Chapter 13 stops lenders from foreclosing and gives debtors extra time to repay mortgage arrears, but does not … and we evaluate it using a new dataset of debtors who filed for bankruptcy under Chapter 13 in 2006. We also examine the …