Post-Purchase Counseling and Default Resolutions Among Low- and Moderate-Income Borrowers

30 Pages Posted: 25 Jan 2008 Last revised: 20 Jul 2009

See all articles by Lei Ding

Lei Ding

University of North Carolina (UNC) at Chapel Hill

Roberto Quercia

University of North Carolina (UNC) at Chapel Hill - Department of City and Regional Planning

Janneke Ratcliffe

University of North Carolina (UNC) at Chapel Hill

Abstract

The rise of delinquencies and foreclosures in a softening housing market calls for systematic studies of default behavior and efforts to minimize the default risks. Using a sample of residential mortgages made to low- to moderate-income borrowers, this paper empirically examines the impact of a proactive post-purchase counseling service on moderately delinquent mortgages. It demonstrates that well-timed, situation-appropriate counseling, even over the phone, effectively increases the curing probability of delinquent borrowers. The findings hold even after accounting for unobserved heterogeneity among borrowers and the endogeneity problem. Many other factors, such as home equity, local economic conditions, and borrower and loan characteristics, also impact the transition of delinquencies.

Suggested Citation

Ding, Lei and Quercia, Roberto G. and Ratcliffe, Janneke, Post-Purchase Counseling and Default Resolutions Among Low- and Moderate-Income Borrowers. Journal of Real Estate Research (JRER), Vol. 30, No. 3, 2008. Available at SSRN: https://ssrn.com/abstract=1086381

Lei Ding (Contact Author)

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Roberto G. Quercia

University of North Carolina (UNC) at Chapel Hill - Department of City and Regional Planning ( email )

New East Building
Chapel Hill, NC 27599-3140
United States
919-962-4766 (Phone)
Not available (Fax)

Janneke Ratcliffe

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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