Abstract

http://ssrn.com/abstract=2055857
 


 



Mortgage Meltdown: Default Sensitivity to Declining Home Values and Loan-to-Value Ratios


Yannick Schindler


Colorado College - Department of Economics and Business

Judith A. Laux


Colorado College - Department of Economics and Business

May 10, 2012

Colorado College Working Paper No. 2012-04

Abstract:     
The current study investigates the recent mortgage crisis to determine whether deteriorating aggregate loan-to-value (LTV) ratios resulted in more acute default responses to depreciating home prices. We find evidence that default rates did not behave erratically or disproportionately to falling housing values during the subprime crisis, but we found some proof that the aggregate LTV ratio was associated with increased foreclosure rate volatility.

Number of Pages in PDF File: 9

Keywords: Mortgage Crisis, Default, Home Values, Loan to Value Ratios

JEL Classification: G21, R2

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Date posted: May 10, 2012 ; Last revised: May 20, 2012

Suggested Citation

Schindler, Yannick and Laux, Judith A., Mortgage Meltdown: Default Sensitivity to Declining Home Values and Loan-to-Value Ratios (May 10, 2012). Colorado College Working Paper No. 2012-04. Available at SSRN: http://ssrn.com/abstract=2055857 or http://dx.doi.org/10.2139/ssrn.2055857

Contact Information

Yannick Schindler
Colorado College - Department of Economics and Business ( email )
14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
Judith A. Laux (Contact Author)
Colorado College - Department of Economics and Business ( email )
14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
7193896414 (Phone)
7193896927 (Fax)
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