Abstract

http://ssrn.com/abstract=2138314
 


 



Policy Intervention in Debt Renegotiation: Evidence from the Home Affordable Modification Program


Sumit Agarwal


National University of Singapore

Gene Amromin


Federal Reserve Bank of Chicago

Itzhak Ben-David


Ohio State University - Fisher College of Business, Finance Department; National Bureau of Economic Research (NBER)

Souphala Chomsisengphet


Office of the Comptroller of the Currency (OCC)

Tomasz Piskorski


Columbia Business School - Finance and Economics

Amit Seru


University of Chicago - Booth School of Business

February 15, 2016

Journal of Political Economy, Forthcoming
Fisher College of Business Working Paper No. 2012-03-020
Charles A. Dice Center Working Paper No. 2012-20

Abstract:     
We evaluate the effects of the 2009 Home Affordable Modification Program (HAMP) that provided intermediaries with sizeable financial incentives to renegotiate mortgages. HAMP increased intensity of renegotiations and prevented substantial number of foreclosures but reached just one-third of its targeted indebted households. This shortfall was in large part due to low renegotiation intensity of a few large intermediaries and was driven by intermediary-specific factors. Exploiting regional variation in the intensity of program implementation by intermediaries suggests that the program was associated with lower rate of foreclosures, consumer debt delinquencies, house price declines, and an increase in durable spending.

Number of Pages in PDF File: 63

Keywords: Government intervention, Debt renegotiation, Mortgage modification, Foreclosures, Housing crisis, HAMP, Servicers

JEL Classification: E60, E65, G18, G21, H3


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Date posted: August 29, 2012 ; Last revised: July 21, 2016

Suggested Citation

Agarwal, Sumit and Amromin, Gene and Ben-David, Itzhak and Chomsisengphet, Souphala and Piskorski, Tomasz and Seru, Amit, Policy Intervention in Debt Renegotiation: Evidence from the Home Affordable Modification Program (February 15, 2016). Journal of Political Economy, Forthcoming; Fisher College of Business Working Paper No. 2012-03-020; Charles A. Dice Center Working Paper No. 2012-20. Available at SSRN: http://ssrn.com/abstract=2138314 or http://dx.doi.org/10.2139/ssrn.2138314

Contact Information

Sumit Agarwal
National University of Singapore ( email )
15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)
HOME PAGE: http://www.ushakrisna.com
Gene Amromin
Federal Reserve Bank of Chicago ( email )
230 South LaSalle Street
230 S. LaSalle
Chicago, IL 60604
United States
3123225368 (Phone)
3123226011 (Fax)
Itzhak Ben-David
Ohio State University - Fisher College of Business, Finance Department ( email )
2100 Neil Avenue
Fisher 700D
Columbus, OH 43210-1144
United States
773 988 1353 (Phone)
HOME PAGE: http://fisher.osu.edu/fin/faculty/Ben-David/index.htm

National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://fisher.osu.edu/fin/faculty/Ben-David/
Souphala Chomsisengphet
Office of the Comptroller of the Currency (OCC) ( email )
400 7th Street, SW
Washington, DC 20219
United States
202-649-5533 (Phone)
Tomasz Piskorski
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States

Amit Seru (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

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