Who Enters the Foreclosure Process?
CUNY Brooklyn College - Department of Economics
City University of New York (CUNY) - New York City College of Technology
November 21, 2011
Since February 2010, detailed information on every home mortgage default and foreclosure in New York State must be filed with the New York State Banking Department (NYSBD). Our analysis of the NYSBD data suggests that borrowers in default who took larger loans are more likely to progress to a foreclosure filing. It also suggests that reducing principal balances may reduce the foreclosure rate, but might have an adverse effect on the mortgage industry.
Given the frequent criticism of the Home Affordable Modification Program (HAMP), it is no surprise that defaulted borrowers whose mortgages were modified via HAMP progress to a lis pendens filing a higher rate than defaulted borrowers without a modification or with a non-HAMP modification. After controlling for delinquency length (and other factors) however, we find that the HAMP program may have been effective in helping defaulted borrowers avoid foreclosure.
Number of Pages in PDF File: 16
Keywords: mortgage, default, foreclosure
JEL Classification: G21
Date posted: October 3, 2011 ; Last revised: December 12, 2011