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DEFAULT MORTGAGE PROFILE: A MICRO ANALYSIS OF THE PORTUGUESE CASE

João Rebelo () and José Vaz Caldas ()
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João Rebelo: Centre of Transdisciplinary of Development (CETRAD), Economics, Sociology and Management Department (DESG) of Trás-os-Montes e Alto Douro (UTAD)
José Vaz Caldas: Centre of Transdisciplinary of Development (CETRAD), Economics, Sociology and Management Department (DESG) of Trás-os-Montes e Alto Douro (UTAD )

Portuguese Journal of Management Studies, 2010, vol. XV, issue 1, 109-125

Abstract: The crisis in the mortgage credit market along with its repercussions in the financial system and in the real economy led us to question how credit institutions are able to analyze the issue of mortgage default. This paper aims to assess the influence of default on mortgage in Portugal as well as the variables related to defaulters’ social and economic features and their loan capacity. In order to do this, an ordered probit model is estimated using a dataset of Portuguese households. The econometric results of this model indicate that loan capacity related variables (number of banking loans, financial effort rate and the ratio between loan amount and guarantee or real estate value) influence the ranking default probability. Furthermore, regarding the social and economic variables, only the dummies, such as “marital status” and “place of residence”, and the quantitative ones, such as “family size” and “monthly income”, became relevant.

Keywords: households; mortgage; default; management risk; ordered probit (search for similar items in EconPapers)
JEL-codes: D11 D12 D14 G21 G33 (search for similar items in EconPapers)
Date: 2010
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