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- W3203400761 abstract "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." @default.
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- W3203400761 date "2022-05-01" @default.
- W3203400761 modified "2023-10-18" @default.
- W3203400761 title "Financially constrained mortgage servicers" @default.
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- W3203400761 doi "https://doi.org/10.1016/j.jfineco.2021.09.026" @default.
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