The role of the economic environment on mortgage defaults during the Great Recession

• Autores: Camilo Sarmiento
• Localización: Applied financial economics, ISSN 0960-3107, Vol. 22, Nº. 1-3, 2012, págs. 243-250
• Idioma: inglés
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• Resumen

  • This article shows that the rise in unemployment played a very significant factor in the rise of mortgage delinquencies during the Great Recession. Estimation results, moreover, show that changes in the Unemployment Rate (UR; from loan origination) as opposed to the level of the UR explain mortgage default. Mortgage default is found to be significantly less responsive to declines than to increases in the UR.