Thursday, September 24, 2009

I am looking forward to seeing this paper at the Atlanta Fed-University of Wisconsin conference tomorrow

Andra C. Ghent and Marianna Kudlyaky
Federal Reserve Bank of Richmond Working Paper No. 09-10

July 7th, 2009

Abstract

We analyze the impact of lender recourse on mortgage defaults theoretically and
empirically across U.S. states. We study the effect of state laws regarding deficiency
judgments in a model where lenders can use the threat of a deficiency judgment to deter
default or to shorten the default process. Empirically, we found that recourse decreases
the probability of default when there is a substantial likelihood that a borrower has
negative home equity. We also found that, in states that allow deficiency judgments,
defaults are more likely to occur through a lender-friendly procedure, such as a deed
in lieu of foreclosure.

10 comments:

Anonymous said...

I wish you health and happiness every day!
Ich wunsche Ihnen Gluck und Gesundheit jeden Tag!
Je vous souhaite sante et bonheur chaque jour!

網路行銷
seo

Anonymous said...

I wish you health and happiness every day!
Ich wunsche Ihnen Gluck und Gesundheit jeden Tag!
Je vous souhaite sante et bonheur chaque jour!

網路行銷
seo

willie green said...

Although, remember that in states like Wisconsin asking for deficiency judgment means homeowner is allowed to stay in their home essentially rent free for twice as much time. Followed by bankruptcy.

Anonymous said...

Of course. Non recourse loans are a license to make risk free bets on bubbles. Someone else takes all the risk, and the borrower gets all the reward if they can flip the property.

US mortgage standards are still far out of step with the rest of the world. There is no realistic chance of a normal private mortgage market returning under these circumstances. Taxpayers will have to subsidize absurd high default loans for a long time, at great cost.

David Barker said...

I'm with Willie Green - the question to ask is whether states that technically allow deficiency judgements really give lenders anything substantial.

Toronto real estate said...

Hello and thank you for your article. I definitely agree that this is not the best way. Continuous living on loans creates more and more "bubbles" which end up with bankrupcy and, consequently, financial crisis. People should be more careful with them!

Take care,

Elli

best bank rates said...

That is true; people are getting more dependent on loans and credits. They should know how to manage there budgets and how to pay back the credits. Flow of money in current market is dropping day by day, which is not at all good.

eda said...

按摩棒,電動按摩棒,飛機杯,自慰套,自慰套,情趣用品,情趣內衣,
角色扮演,按摩棒,跳蛋,情趣跳蛋,

G點,性感丁字褲,情趣,角色扮演服,吊帶襪,丁字褲,無線跳蛋,

情趣,情趣用品,衣蝶,
色情小說|七夕情人,一夜情,

情趣按摩棒,.,
潤滑液,SM,內衣,性感內衣,自慰器,充氣娃娃,AV,

Anonymous said...

It was certainly interesting for me to read that post. Thank you for it. I like such topics and anything that is connected to this matter. I definitely want to read a bit more on that blog soon.

zhuzhulee said...

PDF Créateur
TIFF en PDF Convertisseur
Texte en PDF Convertisseur
PowerPoint en PDF Convertisseur
image en PDF convertisseur
Excel en PDF Convertisseur
CHM en PDF Convertisseur
Word en PDF Convertisseur
djvu to pdf
pdf to png