Leverage and the Foreclosure Crisis

• 成果类型: Article
• 署名作者: Corbae, Dean; Quintin, Erwan
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; National Bureau of Economic Research
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/677349
• 发表日期: 2015
• 页码: 1-65
• 关键词: housing-market; credit; prices; sense

摘要

How much of the foreclosure crisis can be explained by the large number of high-leverage mortgages originated during the housing boom? In our model, heterogeneous households select from mortgages with different down payments and choose whether to default given income and housing shocks. The use of low-down payment loans is initially limited by payment-to-income requirements but becomes unrestricted during the boom. The model approximates key housing and mortgage market facts before and after the crisis. A counterfactual experiment suggests that the increased number of high-leverage loans originated prior to the crisis can explain over 60 percent of the rise in foreclosure rates.