Why homeowners’ documentation went missing under the Home Affordable Mortgage Program (HAMP)?: An analysis of strategic behavior of homeowners and servicers
Journal of Housing Economics, 2013, vol. 22, issue 2, 146-162
This study investigated why documentation of certain homeowners who participated in the trial period plan (TPP) of HAMP went missing using a model of strategic behavior of homeowners and servicers. I found that the likelihood of cancellation of the TPP for missing documentation was higher for those who were current on their mortgage payments, compared to those 30days delinquent, prior to entering the plan—both types of homeowners entered the program because they were in danger of imminent default. This finding, which is consistent with servicers “steering” homeowners with low credit risk away from HAMP to their own (proprietary) modifications, is more likely for loans owned or guaranteed by the government-sponsored enterprises (GSE) than non-GSE loans—the GSE loans have relatively more homeowners with low credit risks. The outcome, not widespread across servicers, is possibly related to the lack of standardization across servicers in identifying borrowers in danger of imminent default. Missing documentation is also associated with severely delinquent homeowners who had less incentive or were unable to submit complete documentation. This cohort of borrowers could benefit from financial education and Treasury’s proposal that servicers provide a single point of contact for borrowers would help reduce the problem of missing documentation.
Keywords: HAMP; Imminent default; Missing documentation; Proprietary modification; Mortgage; Trial period plan (search for similar items in EconPapers)
JEL-codes: G21 G28 R21 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:22:y:2013:i:2:p:146-162
Access Statistics for this article
Journal of Housing Economics is currently edited by H. O. Pollakowski
More articles in Journal of Housing Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().