Financially constrained mortgage servicers

• 成果类型: Article
• 署名作者: Aiello, Darren J.
• 署名单位: Brigham Young University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.09.026
• 发表日期: 2022
• 页码: 590-610
• 关键词: Mortgage servicing; securitization; Real estate; financial constraints

摘要

Financially constrained mortgage servicers destroyed substantial MBS investor value during the financial crisis through their management of delinquent mortgages. Servicers advance to investors monthly payments missed by borrowers. In order to minimize this obligation to extend financing to distressed borrowers, constrained servicers aggressively pursued foreclosures and modifications at the expense of investors, borrowers, and future mortgage performance. When agency frictions between the servicer and the investor are higher, the servicer's financial constraints matter more. IV regressions suggest that, on average per defaulted loan, servicers' financial constraints are responsible for 20% of the total investor value reduction during the financial crisis. (c) 2021 Elsevier B.V. All rights reserved.