Can't Pay or Won't Pay? Unemployment, Negative Equity, and Strategic Default

• 成果类型: Article
• 署名作者: Gerardi, Kristopher; Herkenhoff, Kyle F.; Ohanian, Lee E.; Willen, Paul S.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Atlanta; University of Minnesota System; University of Minnesota Twin Cities; University of California System; University of California Los Angeles; Arizona State University; Arizona State University-Tempe; Federal Reserve System - USA; Federal Reserve Bank - Boston
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx115
• 发表日期: 2018
• 页码: 1098
• 关键词: MORTGAGE DEFAULT; CRISIS; COSTS

摘要

This paper uses new data from the PSID to quantify the relative importance of negative equity versus ability to pay, in driving mortgage defaults between 2009 and 2013. These data allow us to construct household budgets sets that provide better measures of ability to pay. Changes in ability to pay have large estimated effects. Job loss has an equivalent effect on the propensity to default as a 35% decline in equity. Strategic motives are also found to be quantitatively important, as we estimate more than 38% of households in default could make their mortgage payments without reducing consumption.