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Working Paper
Fleeting Forbearance in a World of Persistent Financial Distress
CORRECT ORDER OF AUTHORS: Mustre-del-Río, Sánchez, Athreya. Relative to the persistent delinquency typically observed in consumer credit, mortgage forbearance during the COVID-19 pandemic was surprisingly short-lived. To understand why, we develop a rich structural model and estimate it on credit panel microdata. Next, using the model and survey data, we identify key roles for both selection into mortgages by relatively patient households and the failure of anticipated income losses to materialize. Even taking selection in account, had losses occurred, forbearance participation would have ...
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Fleeting Forbearance in a World of Persistent Financial Distress
CORRECT ORDER OF AUTHORS: Mustre-del-Río, Sánchez, Athreya. Relative to the persistent delinquency typically observed in consumer credit, mortgage forbearance during the COVID-19 pandemic was surprisingly short-lived. To understand why, we develop a rich structural model and estimate it on credit panel microdata. Next, using the model and survey data, we identify key roles for both selection into mortgages by relatively patient households and the failure of anticipated income losses to materialize. Even taking selection in account, had losses occurred, forbearance participation would have ...
Working Paper
Fleeting Forbearance in a World of Persistent Financial Distress
CORRECT ORDER OF AUTHORS: Mustre-del-Río, Sánchez, Athreya. During the COVID-19 pandemic, use of mortgage forbearance was fleeting; this paper offers two reasons why.