Replication data for: Mortgage Modification and Strategic Behavior: Evidence from a Legal Settlement with Countrywide
Principal Investigator(s): View help for Principal Investigator(s) Christopher Mayer; Edward Morrison; Tomasz Piskorski; Arpit Gupta
Version: View help for Version V1
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| Data-Description-and-Program-Folder-Accepted-Manuscript-AER-2011-0594 | 12/06/2019 04:22:PM | ||
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text/plain | 14.6 KB | 12/06/2019 11:22:AM |
Project Citation:
Mayer, Christopher, Morrison, Edward, Piskorski, Tomasz, and Gupta, Arpit. Replication data for: Mortgage Modification and Strategic Behavior: Evidence from a Legal Settlement with Countrywide. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116130V1
Project Description
Summary:
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We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by settlement of U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers. Using a difference-in-difference framework, we find that Countrywide's monthly delinquency rate increased more than 0.54 percentage points—a ten percent relative increase—immediately after the settlement's announcement. The estimated increase in default rates is largest among borrowers least likely to default otherwise. These results suggest that strategic behavior should be an important consideration in designing mortgage modification programs. (JEL D10, G21, G33, K00)
Scope of Project
JEL Classification:
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D14 Household Saving; Personal Finance
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
K22 Business and Securities Law
R31 Housing Supply and Markets
D14 Household Saving; Personal Finance
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
K22 Business and Securities Law
R31 Housing Supply and Markets
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