Search Results
Working Paper
The role of securitization in mortgage renegotiation
Agarwal, Sumit; Ben-David, Itzhak; Chomsisengphet, Souphala; Evanoff, Douglas D.; Amromin, Gene
(2011)
We study the effects of securitization on renegotiation of distressed residential mortgages over the current financial crisis. Unlike prior studies, we employ unique data that directly observe lender renegotiation actions and cover more than 60% of the U.S. mortgage market. Exploiting within-servicer variation in these data, we find that bank-held loans are 26% to 36% more likely to be renegotiated than comparable securitized mortgages (4.2 to 5.7% in absolute terms). Also, modifications of bank-held loans are more efficient: conditional on a modification, bank-held loans have lower ...
Working Paper Series
, Paper WP-2011-02
Working Paper
Rushing into American Dream? House Prices, Timing of Homeownership, and Adjustment of Consumer Credit
Agarwal, Sumit; Hu, Luojia; Huang, Xing
(2013-11-01)
In this paper we use a large panel of individuals from Consumer Credit Panel dataset to study the timing of homeownership as a function of credit constraints and expectations of future house price. Our panel data allows us to track individuals over time and we model the transition probability of their first home purchase. We find that in MSAs with highest quartile house price growth, the median individual become homeowners earlier by 5 years in their lifecycle compared to MSAs with lowest quartile house price growth. The result suggests that the effect of expectation dominates the effect of ...
Working Paper Series
, Paper WP-2013-13
Newsletter
Comparing the prime and subprime mortgage markets
Agarwal, Sumit; Ho, Calvin T.
(2007-08)
Against the backdrop of news reports on high mortgage delinquency rates, this article examines recent trends in mortgage lending and compares the prime and subprime markets in particular.
Chicago Fed Letter
, Issue Aug
Conference Paper
Distance and information asymmetries in lending decisions
Agarwal, Sumit; Hauswald, Robert
(2007)
Proceedings
, Paper 1052
Journal Article
The asset-backed securities markets, the crisis and TALF
Agarwal, Sumit; De Nardi, Mariacristina; Barrett, Jacqueline; Cun, Crystal
(2010-10)
The authors explain the role of asset-backed securities markets in generating credit and liquidity and how this role was disrupted during the financial crisis. They discuss the implementation of the Term Asset-Backed Securities Loan Facility (TALF) and argue that this program helped reestablish the ABS markets and the credit supply. and the reversion to a stable fiscal regime.
Economic Perspectives
, Volume 34
, Issue Q IV
, Pages 101-115
Working Paper
Does inequality cause financial distress? Evidence from lottery winners and neighboring bankruptcies
Agarwal, Sumit; Scholnick, Barry; Mikhed, Vyacheslav
(2016-02-11)
Revised Oct 2016. We test the hypothesis that income inequality causes financial distress. To identify the effect of income inequality, we examine lottery prizes of random dollar magnitudes in the context of very small neighborhoods (13 households on average). We find that a C$1,000 increase in the lottery prize causes a 2.4% rise in subsequent bankruptcies among the winners? close neighbors. We also provide evidence of conspicuous consumption as a mechanism for this causal relationship. The size of lottery prizes increases the value of visible assets (houses, cars, motorcycles), but not ...
Working Papers
, Paper 16-4
Journal Article
Determinants of automobile loan default and prepayment
Agarwal, Sumit; Chomsisengphet, Souphala; Ambrose, Brent W.
(2008-07)
The authors examine whether a borrower?s choice of automobile reveals information about future loan performance. They find that loans on most luxury automobiles have a higher probability of prepayment, while loans on most economy automobiles have a lower probability of default, even when holding traditional risk factors, such as income and credit score, constant.
Economic Perspectives
, Volume 32
, Issue Q III
Working Paper
Market-based loss mitigation practices for troubled mortgages following the financial crisis
Agarwal, Sumit; Ben-David, Itzhak; Chomsisengphet, Souphala; Evanoff, Douglas D.; Amromin, Gene
(2011)
The meltdown in residential real-estate prices that commenced in 2006 resulted in unprecedented mortgage delinquency rates. Until mid-2009, lenders and servicers pursued their own individual loss mitigation practices without being significantly influenced by government intervention. Using a unique dataset that precisely identifies loss mitigation actions, we study these methods?liquidation, repayment plans, loan modification, and refinancing?and analyze their effectiveness. We show that the majority of delinquent mortgages do not enter any loss mitigation program or become a part of ...
Working Paper Series
, Paper WP-2011-03
Working Paper
Perverse incentives at the banks? Evidence from a natural experiment
Agarwal, Sumit; Wang, Faye H.
(2009)
Incentive provision is a central question in modern economic theory. During the run up to the financial crisis, many banks attempted to encourage loan underwriting by giving out incentive packages to loan officers. Using a unique data set on small business loan officer compensation from a major commercial bank, we test the model?s predictions that incentive compensation increases loan origination, but may induce the loan officers to book more risky loans. We find that the incentive package amounts to a 47% increase in loan approval rate, and a 24% increase in default rate. Overall, we find ...
Working Paper Series
, Paper WP-09-08
Working Paper
Why do borrowers make mortgage refinancing mistakes?
Rosen, Richard J.; Agarwal, Sumit; Yao, Vincent W.
(2013)
Refinancing a mortgage is often one of the biggest and most important financial decisions that people make. Borrowers need to choose the interest rate differential at which to refinance and, when that differential is reached, they need to take the steps to refinance before rates change again. The optimal differential is where the interest saved by refinancing equals the sum of refinancing costs and the option value of refinancing. Using a unique panel data set, we find that approximately 59% of borrowers refinance sub-optimally ? with 52% of the sample making errors of commission (choosing ...
Working Paper Series
, Paper WP-2013-02
FILTER BY year
FILTER BY Bank
FILTER BY Series
Working Paper Series 17 items
Working Papers 8 items
Economic Perspectives 5 items
Finance and Economics Discussion Series 4 items
Chicago Fed Letter 3 items
International Finance Discussion Papers 2 items
Proceedings 2 items
FRB Atlanta Working Paper 1 items
Profitwise 1 items
show more (4)
show less
FILTER BY Content Type
FILTER BY Author
Chomsisengphet, Souphala 10 items
Amromin, Gene 5 items
Liu, Chunlin 5 items
Ben-David, Itzhak 4 items
Scholnick, Barry 4 items
Souleles, Nicholas S. 4 items
Ambrose, Brent W. 3 items
De Nardi, Mariacristina 3 items
Driscoll, John C. 3 items
Evanoff, Douglas D. 3 items
Mikhed, Vyacheslav 3 items
Presbitero, Andrea F. 3 items
Silva, André F. 3 items
Barrett, Jacqueline 2 items
Correa, Ricardo 2 items
Cun, Crystal 2 items
Hauswald, Robert 2 items
Mazumder, Bhashkar 2 items
Morais, Bernardo 2 items
Roldán, Jessica 2 items
Roman, Raluca 2 items
Ruiz-Ortega, Claudia 2 items
Wix, Carlo 2 items
Aaronson, Daniel 1 items
An, Xudong 1 items
Chakravorti, Sujit 1 items
Cordell, Lawrence R. 1 items
Darden, Michael 1 items
Diop, Moussa 1 items
Dowdy, David 1 items
French, Eric 1 items
Gabaix, Xavier 1 items
Gardner, Lauren 1 items
Gartenberg, Claudine 1 items
Genay, Hesna 1 items
Gross, Tal 1 items
Hamilton, Barton 1 items
Ho, Calvin T. 1 items
Hu, Luojia 1 items
Huang, Xing 1 items
Kigabo, Thomas 1 items
Kopecky, Karen A. 1 items
Laibson, David I. 1 items
Li, Wenli 1 items
Lunn, Anna 1 items
Marx, Melissa 1 items
McGranahan, Leslie 1 items
McMenamin, Robert 1 items
Mikhed, Slava 1 items
Minoiu, Camelia 1 items
Papageorge, Nicholas 1 items
Paulson, Anna L. 1 items
Piskorski, Tomasz 1 items
Polsky, Daniel 1 items
Powers, Kimberly 1 items
Rosen, Richard J. 1 items
Seru, Amit 1 items
Sorokina, Nonna 1 items
Stuart, Elizabeth 1 items
Villupuram, Sriram 1 items
Wang, Faye H. 1 items
Yao, Vincent W. 1 items
Zahn, Matthew 1 items
Zhang, Man 1 items
show more (60)
show less
FILTER BY Jel Classification
G21 8 items
G28 5 items
G01 4 items
D14 3 items
D31 3 items
E58 3 items
G51 3 items
K35 3 items
D12 2 items
E52 2 items
G02 2 items
G18 2 items
G40 2 items
G53 2 items
C14 1 items
C8 1 items
D10 1 items
D91 1 items
E60 1 items
E65 1 items
G0 1 items
G13 1 items
H0 1 items
H3 1 items
I1 1 items
J0 1 items
O12 1 items
O55 1 items
R21 1 items
R3 1 items
R31 1 items
R38 1 items
Z1 1 items
show more (28)
show less
FILTER BY Keywords
Credit cards 6 items
Asset-backed financing 5 items
Consumer credit 5 items
Loans 4 items
Mortgages 4 items
Bank loans 3 items
Mortgage loans 3 items
Securities 3 items
Bank lending 2 items
Commodity prices 2 items
Consumer behavior 2 items
Consumption (Economics) 2 items
Credit 2 items
Emerging markets 2 items
Financial crises 2 items
Financial sophistication 2 items
Financial stability 2 items
Household finance 2 items
Households - Finance 2 items
Rewards 2 items
credit exposures 2 items
financial distress 2 items
social comparisons among peers 2 items
Access to credit 1 items
Advertising 1 items
Automobiles - Prices 1 items
Bankruptcy 1 items
Commercial loans 1 items
Conspicuous consumption 1 items
Consumer Finance 1 items
Contracts 1 items
Corporations - Finance 1 items
Covid-19 1 items
Credit Constraints 1 items
Credit Supply 1 items
Debt 1 items
Debt management 1 items
Debt renegotiation 1 items
Financial distress 1 items
Financial institutions 1 items
Financial literacy 1 items
Foreclosures 1 items
Government intervention 1 items
Great Recession 1 items
HAMP 1 items
Home equity loans 1 items
Homebuilders 1 items
Homeownership 1 items
Household Finance 1 items
Housing 1 items
Housing crisis 1 items
Incentive awards 1 items
Income inequality 1 items
Life Cycle 1 items
Lottery 1 items
Microfinance 1 items
Minimum wage 1 items
Mortgage modification 1 items
Mortgage-backed securities 1 items
Opioid Epidemic 1 items
Payday loans 1 items
Risk 1 items
Sales tax 1 items
Servicers 1 items
Spending 1 items
Taxation 1 items
Unbanked 1 items
bank stress tests 1 items
behavior modeling 1 items
cost of credit 1 items
credit bureaus 1 items
credit cards 1 items
credit performance 1 items
credit supply 1 items
credit usage 1 items
economics 1 items
epidemiology 1 items
financial crisis 1 items
health outcomes 1 items
health-wealth tradeoffs 1 items
household income 1 items
lease defaults 1 items
minimum wage increases 1 items
mortgage loans 1 items
public health 1 items
rental market 1 items
strategic default 1 items
show more (82)
show less