A Discriminant Function Analysis of Residential Mortgage Delinquency and Foreclosure

Morton, T. Gregory

doi:10.1111/1540-6229.00133

Cited by 40 publications

(29 citation statements)

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“…For example, von Furstenberg and Green [1974] and Morton [1975] find that the loan to value (LTV) ratio at origination and the income of the borrower play important roles in mortgage delinquency. Getter [2003] complements these findings by using the 1998 Survey of Consumer Finances to show that borrowers use other non-housing financial assets to help make payments during unexpected periods of financial stress.…”

Section: Motivation and Literature Reviewmentioning

confidence: 99%

A Dynamic Look at Subprime Loan Performance

Danis

Pennington‐Cross

2005

SSRN Journal

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Section: Motivation and Literature Reviewmentioning

confidence: 99%

A Dynamic Look at Subprime Loan Performance

Danis

Pennington‐Cross

2005

SSRN Journal

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“…A summary of the variables and measures included in the analysis is presented in Other researchers that have used only sub-national data sets (state, county, and city-wide) include von Furstenberg (1969Furstenberg ( , 1970von Furstenberg and Green (1974);Williams et al (1974); Sandor and Sosin (1975);and Morton (1975). received interest credit at origination and later graduated from the subsidy (ZEROSUB) was also included.…”

Section: Variables and Measuresmentioning

confidence: 99%

Mortgage Default Among Rural, Low-Income Borrowers

1998

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In this paper, we examine the effect of contemporaneous borrower, property, and loan characteristics on the default decision of a sample of lower income, subsidized rural borrowers participating in the Farmers Home Administration Section 502program.To our knowledge, this is the first time that borrower related panel information has been used in a default study.Contrary to prior work, contemporaneous net equity, captured by the variable loan to value ratio, was found to have no effect on default.In contrast, mortgage pa;Tr.ant to income ratio and a number of borrower related factors were found to significantly affect the default decision. Overall, the study findings suggest that the main.aspect of the FmHA Section 502 program, the interest rate subsidy, minimizes default risk for the average program participant.

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“…8 more recent options oriented theoretical models. For instance, using sparse data sets from the 1960s and early 1970s, Morton (1975) and Furstenberg and Green (1974) found evidence that the LTV at origination and income of the borrower were important determinants of the delinquency rates. The tenor of the results are remarkably similar in a more recent paper that examined delinquency rates in the United Kingdom (UK) using data from 1983 through 1992.…”

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confidence: 99%

The Delinquency of Subprime Mortgages

Danis

Pennington‐Cross

2005

SSRN Journal

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Abstract:The lag between the time that a borrower stops making payments on a mortgage and the termination of the loan plays a critical role in the costs borne by both borrower and lender on defaulted loans. While the prior literature uses a multinomial logit approach, statistical tests indicate that we cannot accept the associated assumption of Independence of Irrelevant Alternatives (IIA). Using a nested logit specification our results suggest that the recipe for delinquency involves young loans to low credit score borrowers with low or no documentation in housing markets with moderately volatile and flat or declining nominal house prices.

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A Discriminant Function Analysis of Residential Mortgage Delinquency and Foreclosure

Cited by 40 publications

References 0 publications

A Dynamic Look at Subprime Loan Performance

A Dynamic Look at Subprime Loan Performance

Mortgage Default Among Rural, Low-Income Borrowers

The Delinquency of Subprime Mortgages

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