Recourse and Residential Mortgage Default: Evidence from US States

• 成果类型: Article
• 署名作者: Ghent, Andra C.; Kudlyak, Marianna
• 署名单位: City University of New York (CUNY) System; Baruch College (CUNY); Federal Reserve System - USA; Federal Reserve Bank - Richmond
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhr055
• 发表日期: 2011
• 页码: 3139
• 关键词: foreclosure; exercise

摘要

We quantify the effect of recourse on default and find that recourse affects default by lowering the borrower's sensitivity to negative equity. At the mean value of the default option for defaulted loans, borrowers are 30% more likely to default in non-recourse states. Furthermore, for homes appraised at $500,000 to $750,000, borrowers are twice as likely to default in non-recourse states. We also find that defaults are more likely to occur through a lender-friendly procedure, such as a deed in lieu, in states that allow deficiency judgments. We find no evidence that mortgage interest rates are lower in recourse states. (JEL E44, G21, G28, K11, R20)