Subprime Paper of the Day

Kristopher Gerardi,

Adam Hale Shapiro, and Paul Willen of the Boston Fed:

This paper provides the first rigorous assessment of the homeownership experiences

of subprime borrowers… We present two main findings. First, homeownerships

that begin with a subprime purchase mortgage end up in foreclosure almost

20 percent of the time, or more than 6 times as often as experiences that

begin with prime purchase mortgages. Second, house price appreciation plays

a dominant role in generating foreclosures.

(Via Research


This entry was posted in housing. Bookmark the permalink.