 Mortgage Relief: Who CARES?Mariya Letdin and Meagan McCollum Journal of Housing Research, 2023, vol. 32, issue 1, 81-102 Abstract: We analyze the effects of being ineligible for mortgage payment relief by examining the aftermath of the Home Affordable Refinance Program (HARP). Using a comparable sample of borrowers with publicly (Freddie Mac) and privately (Bbx) securitized loans we compare loan performance and quantify potential wealth, consumption, and credit consequences for prime borrowers whose loans were placed in private securitization pools and who were thus ineligible for a government relief program. We show that restricting program benefits to include only borrowers in federally backed mortgage pools results in significant loss in wealth (through reduced prepayment and increased default) for those otherwise similar borrowers whose loans are placed outside of GSE pools. The greatest detriment is documented in CBSAs with the largest housing price declines. The results shed light on the potential consequences of an identical provision in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which provides mortgage forbearance relief to qualifying borrowers, whose loans are placed in a government backed mortgage pool. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:rjrhxx:v:32:y:2023:i:1:p:81-102 Ordering information: This journal article can be ordered from DOI: 10.1080/10527001.2022.2079170 Access Statistics for this article Journal of Housing Research is currently edited by Kimberly Goodwin More articles in Journal of Housing Research from Taylor & Francis Journals |
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