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A recent dramatic rise in subprime foreclosures has led to calls for restrictions against a range of loan features loosely termed “predatory.” Several cities and states have enacted regulations to curb predatory practices, and some advocacy groups endorse action at the federal level. Using...
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We document the fact that servicers have been reluctant to renegotiate mortgages since the foreclosure crisis started in 2007, having performed payment reducing modifications on only about 3 percent of seriously delinquent loans. We show that this reluctance does not result from securization:...
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A leading explanation for the lack of widespread mortgage renegotiation during the financial crisis is the existence of … frictions in the mortgage securitization process. This paper finds little evidence that the securitization process impeded the … representative dataset on seriously delinquent mortgage borrowers from the first quarter of 2005 through the third quarter of 2008 …
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We document the fact that servicers have been reluctant to renegotiate mortgages since the foreclosure crisis started in 2007, having performed payment reducing modifications on only about 3 percent of seriously delinquent loans. We show that this reluctance does not result from securization:...
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