Topic
Mortgage modification
About: Mortgage modification is a research topic. Over the lifetime, 101 publications have been published within this topic receiving 3826 citations.
Papers
TL;DR: In this paper, the authors conduct a within-county analysis using detailed ZIP code-level data to document new findings regarding the origins of the biggest financial crisis since the Great Depression, finding that the sharp increase in mortgage defaults in 2007 is significantly amplified in subprime ZIP codes, or ZIP codes with a disproportionately large share of subprime borrowers as of 1996.
Abstract: We conduct a within-county analysis using detailed ZIP code—level data to document new findings regarding the origins of the biggest financial crisis since the Great Depression. The sharp increase in mortgage defaults in 2007 is significantly amplified in subprime ZIP codes, or ZIP codes with a disproportionately large share of subprime borrowers as of 1996. Prior to the default crisis, these subprime ZIP codes experience an unprecedented relative growth in mortgage credit. The expansion in mortgage credit from 2002 to 2005 to subprime ZIP codes occurs despite sharply declining relative (and in some cases absolute) income growth in these neighborhoods. In fact, 2002 to 2005 is the only period in the past eighteen years in which income and mortgage credit growth are negatively correlated. We show that the expansion in mortgage credit to subprime ZIP codes and its dissociation from income growth is closely correlated with the increase in securitization of subprime mortgages.
1,682 citations
TL;DR: The first hints of trouble in the mortgage market surfaced in mid-2005, and conditions subsequently began to deteriorate rapidly as mentioned in this paper, and by the third quarter of 2008, the share of seriously delinquent mortgages had surged to 5.2%.
Abstract: The first hints of trouble in the mortgage market surfaced in mid-2005, and conditions subsequently began to deteriorate rapidly. According to data from the Mortgage Bankers Association, the share of mortgage loans that were “seriously delinquent” (90 days or more past due or in the process of foreclosure) averaged 1.7 percent from 1979 to 2006, with a low of about 0.7 percent (in 1979) and a high of about 2.4 percent (in 2002). But by the third quarter of 2008, the share of seriously delinquent mortgages had surged to 5.2 percent. These delinquencies foreshadowed a sharp rise in foreclosures: roughly 1.7 million foreclosures were started in the first three quarters of 2008, an increase of 62 percent from the 1.1 million in the first three quarters of 2007 (Federal Reserve estimates based on data from the Mortgage Bankers Association). No precise national data exist on what share of foreclosures that start are actually completed, but anecdotal evidence suggests that historically the proportion has been somewhat less than half (Cordell, Dynan, Lehnert, Liang, and Mauskopf, 2008). Mortgage defaults and delinquencies are particularly concentrated among borrowers whose mortgages are classified as “subprime” or “near-prime.” Some key players in the mortgage market typically group these two into a single category, which we will call “nonprime” lending. Although the categories are not rigidly defined, subprime loans are generally targeted to borrowers who have tarnished credit histories and little savings available for down payments. Near-prime mortgages are made to borrowers with more minor credit quality issues or borrowers who are unable or unwilling to
823 citations
TL;DR: This article developed a simple theoretical model to interpret these empirical findings and to assess potential foreclosure-reduction policies, which implies that lenders and policymakers face an information problem in trying to help borrowers with negative equity, because it is hard to determine which owners really need help in order to stay in their homes.
485 citations
TL;DR: This paper examined whether securitization impacts renegotiation decisions of loan servicers, focusing on their decision to foreclose a delinquent loan and found a significantly lower foreclosure rate associated with bank-held loans when compared to similar securitized loans.
368 citations
TL;DR: The authors explored the causes and consequences of cross-country variation in mortgage market structure and argued that the USA has much to learn from mortgage finance in other countries, and specifically from the Danish implementation of the European covered bonds system.
Abstract: This article explores the causes and consequences of cross-country variation in mortgage market structure. It draws on insights from several fields: urban economics, asset pricing, behavioral finance, financial intermediation, and macroeconomics. It discusses lessons from the credit boom, the challenges of mortgage modification in the aftermath of the boom, consumer financial protection, and alternative mortgage forms and funding models. The article argues that the USA has much to learn from mortgage finance in other countries, and specifically from the Danish implementation of the European covered bonds system.
276 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2021 | 2 |
| 2020 | 3 |
| 2019 | 1 |
| 2018 | 7 |
| 2017 | 4 |
| 2016 | 8 |