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- W3125549502 abstract "How much can government-driven mortgage modification programs reduce the mortgage default rate? I compare an economy without a modification option to one with easy modifications, and evaluate the impact of these loan modifications on the foreclosure rate. Through loan modification, mortgage servicers can mitigate their losses and households can improve their financial positions without having to walk away from their homes. When modifying loan contracts is prohibitively costly, the default rate increases 1.5 percentage points in response to a 2007-style unexpected drop in housing prices of 30%. I calibrate the cost of modification after the financial crisis to match the Home Affordable Modification Program (HAMP) modification rate of 0.68%. My quantitative exercises show that current government efforts to promote mortgage modifications reduce the mortgage default rate by 0.63 percentage points." @default.
- W3125549502 created "2021-02-01" @default.
- W3125549502 creator A5039016245 @default.
- W3125549502 date "2016-06-20" @default.
- W3125549502 modified "2023-09-27" @default.
- W3125549502 title "HOW LOAN MODIFICATIONS INFLUENCE THE PREVALENCE OF MORTGAGE DEFAULTS" @default.
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- W3125549502 doi "https://doi.org/10.1017/s1365100515000395" @default.
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