This paper studies the intermediation of auto loans through auto dealers using new and comprehensive data. Lenders give auto dealers discretion to price loans. The first part of our project leverages details of the contracts between lenders and dealers to demonstrate that many consumers are...

Many struggling mortgage borrowers who have home equity lose it through foreclosure. To explainwhy they do not just sell their homes instead, this paper develops a new model of mortgage default in which homeowners face psychic moving costs. A transparent calibration procedure yields psychic...