Mortgage Default and Prepayment Risks Among Moderate‐ and Low‐Income Households

40 Pages Posted: 28 Dec 2012

See all articles by Roberto Quercia

Roberto Quercia

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

Anthony Pennington‐Cross

affiliation not provided to SSRN

Chao Yue Tian

affiliation not provided to SSRN

Multiple version iconThere are 4 versions of this paper

Date Written: December 2012

Abstract

Using a unique sample of community reinvestment loans, we study the propensity of very low‐income households to terminate a mortgage and compare it to the outcomes for low‐income and moderate‐income households. The results indicate that, even within moderate‐ and low‐income segments, lower or very low income is associated with higher default and lower prepayment probabilities. In addition, depending on how low the borrower's income is, classic determinants of loan termination such as credit scores, the amount of equity in the home and local labor market conditions can have different impacts on default and prepayment probabilities.

Suggested Citation

Quercia, Roberto G. and Pennington‐Cross, Anthony and Yue Tian, Chao, Mortgage Default and Prepayment Risks Among Moderate‐ and Low‐Income Households (December 2012). Real Estate Economics, Vol. 40, pp. S159-S198, 2012. Available at SSRN: https://ssrn.com/abstract=2194278 or http://dx.doi.org/10.1111/j.1540-6229.2012.00350.x

Roberto G. Quercia (Contact Author)

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)

Anthony Pennington‐Cross

affiliation not provided to SSRN

No Address Available

Chao Yue Tian

affiliation not provided to SSRN

No Address Available

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
2
Abstract Views
386
PlumX Metrics