Bhardwaj, Geetesh; Sengupta, Rajdeep - Federal Reserve Bank of St. Louis - 2008
This paper demonstrates that the reason for widespread default of mortgages in the subprime market was a sudden reversal in the house price appreciation of the early 2000's. Using loan-level data on subprime mortgages, we observe that the majority of subprime loans were hybrid adjustable rate...