Identifying the Effect of Securitization on Foreclosure and Modification Rates Using Early Payment Defaults

Manuel Adelino, Kristopher Gerardi and Paul Willen

The Journal of Real Estate Finance and Economics, 2014, vol. 49, issue 3, 352-378

Abstract: This paper develops and estimates an instrumental variables strategy for identifying the causal effect of securitization on the incidence of mortgage modification and foreclosure based on the early payment default analysis performed by Piskorsi et al. (J Financ Econ 97:360–397, 2010 ). Estimation results show that securitized mortgages are more likely to be modified and less likely to be foreclosed on by servicers. These results are consistent with the interpretation in Adelino et al. ( 2009 ) that low modification rates are not the result of contract frictions inherent in the mortgage securitization process. Copyright Springer Science+Business Media New York (outside the USA) 2014

Keywords: Early payment default; Foreclosure; Mortgage; Securitization; D11; D12; G21 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11146-013-9433-0 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jrefec:v:49:y:2014:i:3:p:352-378

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11146/PS2

DOI: 10.1007/s11146-013-9433-0

Access Statistics for this article

The Journal of Real Estate Finance and Economics is currently edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans

More articles in The Journal of Real Estate Finance and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().