|
|
|
|
||||
|
||||
Joint Liability Lending and Credit Risk: Evidence from the Home Equity MarketSumit AgarwalNational University of Singapore Brent W. AmbrosePennsylvania State University Souphala ChomsisengphetGovernment of the United States of America - Office of the Comptroller of the Currency (OCC) Chunlin LiuUniversity of Nevada, Reno - College of Business July 30, 2010 Abstract: Using a unique dataset of home equity credit contracts, we examine the benefits of joint liability lending. Our results show that the risk of default for joint borrowers with similar risk scores is significantly lower than the risk associated with single borrowers. However, when joint borrowers have divergent risk scores, the risk of default is higher than the single borrowers. Our results indicate that the lower risk associated with joint liability is largely dependent upon the similarity of risk characteristics (profiles) of the joint borrowers. Our results suggest that joint liability lending per say does not reduce credit risk.
Number of Pages in PDF File: 19 Keywords: Consumer Credit, Mortgages, Micro-finance, Information Asymmetry, household finance JEL Classification: G21, D12, D14 working papers seriesDate posted: August 2, 2010Suggested CitationContact Information
|
|
||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo5 in 0.734 seconds
