We investigate whether homeowners respond strategically to news of mortgage modification programs by defaulting on their mortgages. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to...

We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously...

We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously...

We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causal effect of leverage) or adverse selection (ex-ante risky borrowers choosing larger loans). We separate these information asymmetries using a natural experiment resulting from (i) the unique...

I identify shocks to interest rates resulting from two administrative details in adjustable-rate mortgage contract terms: the choices of financial index and lookback period. I find that a 1 percentage point increase in interest rates at the time of ARM reset results in a 2.5 percentage rise in...