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Working Paper
Liquidity problems and early payment default among subprime mortgages
The lack of property tax escrow accounts among subprime mortgages causes borrowers to make large lump-sum tax payments that reduce liquidity. Different property tax collection dates across states and counties create exogenous variation in the time between loan origination and the first property tax due date, affording the opportunity to estimate the causal effect of loan-level exposure to liquidity reductions on mortgage default. We find that a nine-month delay in owing property taxes reduces the probability of first-year default by about 4 percent, or about one-third of the effect of a ...
Newsletter
New Evidence on Where Payday Lenders Locate Their Storefronts
Payday lenders offer short-term, small-dollar, and high-interest consumer loans. Consumers get payday loans primarily from state-licensed storefront locations—of which there were an estimated 13,700 nationwide in 2018—where loans have a median amount of $350 and typical fees equate to an average annual percentage rate (APR) of almost 400%. Unlike traditional financial institutions, such as banks and credit unions, there is no centralized national database on the location of payday lender storefronts.
Newsletter
New Evidence on Where Payday Lenders Locate Their Storefronts
Payday lenders offer short-term, small-dollar, and high-interest consumer loans. Consumers get payday loans primarily from state-licensed storefront locations—of which there were an estimated 13,700 nationwide in 2018—where loans have a median amount of $350 and typical fees equate to an average annual percentage rate (APR) of almost 400%. Unlike traditional financial institutions, such as banks and credit unions, there is no centralized national database on the location of payday lender storefronts.
Identifying Information Gaps to Help Communities Navigate Lead Service Line Replacement
In response to state and federal policy changes, communities across the United States have been developing strategies to undertake the large-scale and complex process of replacing millions of lead service lines (LSLs). These lead pipes supply drinking water to homes and risk exposing households to lead, which can have long-term repercussions for a child’s development and cause chronic health issues in an adult. The challenge of replacing LSLs is felt acutely in the heart of the Midwest—home to the Federal Reserve Bank of Chicago’s Seventh District, which comprises all of Iowa and most ...
Convening Identifies Key Resources for Communities Replacing Lead Service Lines
Communities across the United States are beginning to map and replace lead service lines (LSLs) to comply with new state and federal safe drinking water policies aimed at reducing the risk of lead exposure through drinking water.1 The states in the Federal Reserve Bank of Chicago’s Seventh District—Illinois, Indiana, Iowa, Michigan, and Wisconsin—are estimated to have over 2 million lead pipes, according to a September 2023 report to Congress by the U.S. Environmental Protection Agency’s (EPA) Office of Water; Illinois and Wisconsin rank among the top ten states with the most lead ...