Detecting Mortgage Delinquencies
16 Pages Posted: 8 Aug 2011
Economic hardship is strongly reflected by the housing market. It is the concern of much research, but its analysis is often obstructed by insufficient lagged data. This paper evaluates search intensity for "hardship letter" from Google Insights to detect ensuing mortgage delinquencies. Such searches locate documents which assist to write a successful loan modification request. Other relevant searches for "short sale", "REO" (as in Real Estate Owned) or "FHA" (as in Federal Housing Administration) are used to provide a comprehensive view of the housing market. Using data from the great recession and benchmarking them against data from the labor market, the paper demonstrates that internet activity captures socioeconomic phenomena in real time very well, with no interviewer effect at a high frequency. This suggests that the new data base should spur new housing research.
Keywords: housing, hardship letter, loan delinquency, mortgage, National Delinquency Survey (NDS), financial crisis, recession, bubble, Google Insights
JEL Classification: C81, E65, G21, R31
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