Abstract

https://ssrn.com/abstract=2709312
 


 



Owner Occupancy Fraud and Mortgage Performance


Ronel Elul


Federal Reserve Bank of Philadelphia

Sebastian G Tilson


Federal Reserve Banks - Federal Reserve Bank of Philadelphia

2015-12-17

FRB of Philadelphia Working Paper No. 15-45

Abstract:     
We use a matched credit bureau and mortgage data set to identify occupancy fraud in residential mortgage originations, that is, borrowers who misrepresented their occupancy status as owner occupants rather than residential real estate investors. In contrast to previous studies, our data set allows us to show that such fraud was broad based, appearing in the government-sponsored enterprise market and in loans held on bank portfolios as well. Mortgage borrowers who misrepresented their occupancy status performed worse than otherwise similar owner occupants and declared investors, defaulting at nearly twice the rate. In addition, these defaults are significantly more likely to be 'strategic' in the sense that their bank card performance is better and utilization is lower.

Number of Pages in PDF File: 39

Keywords: Mortgages, Mortgage default, Consumer credit, Household finance, Misreporting, Fraud

JEL Classification: D12, R3


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Date posted: January 5, 2016  

Suggested Citation

Elul, Ronel and Tilson, Sebastian G, Owner Occupancy Fraud and Mortgage Performance (2015-12-17). FRB of Philadelphia Working Paper No. 15-45. Available at SSRN: https://ssrn.com/abstract=2709312

Contact Information

Ronel Elul (Contact Author)
Federal Reserve Bank of Philadelphia ( email )
Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-3965 (Phone)
Sebastian G Tilson
Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )
Ten Independence Mall
Philadelphia, PA 19106-1574
United States
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