Who Enters the Foreclosure Process?

16 Pages Posted: 3 Oct 2011 Last revised: 12 Dec 2011

Eric Doviak

CUNY Brooklyn College - Department of Economics

Sean MacDonald

City University of New York (CUNY) - New York City College of Technology

Date Written: November 21, 2011

Abstract

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.

Keywords: mortgage, default, foreclosure

JEL Classification: G21

Suggested Citation

Doviak, Eric and MacDonald, Sean, Who Enters the Foreclosure Process? (November 21, 2011). Available at SSRN: https://ssrn.com/abstract=1936720 or http://dx.doi.org/10.2139/ssrn.1936720

Eric Doviak (Contact Author)

CUNY Brooklyn College - Department of Economics ( email )

Bedford Avenue and Avenue H
Brooklyn, NY 11210-9966
United States

HOME PAGE: http://www.doviak.net

Sean MacDonald

City University of New York (CUNY) - New York City College of Technology ( email )

300 Jay St
Brooklyn, NY 11201
United States

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