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Article
Mortgage Default and Prepayment Risks among Moderate- and Low-Income Households
Real Estate Economics
  • Roberto G. Quercia, University of North Carolina at Chapel Hill
  • Anthony Pennington-Cross, Marquette University
  • Chao Yue Tian, University of North Carolina at Chapel Hill
Document Type
Article
Language
eng
Format of Original
40 p.
Publication Date
12-1-2012
Publisher
Wiley
Abstract
Using a unique sample of community reinvestment loans, we study the propensity of very low-income households to terminate a mortgage and compare it to the outcomes for low-income and moderate-income households. The results indicate that, even within moderate- and low-income segments, lower or very low income is associated with higher default and lower prepayment probabilities. In addition, depending on how low the borrower's income is, classic determinants of loan termination such as credit scores, the amount of equity in the home and local labor market conditions can have different impacts on default and prepayment probabilities.
Comments

Real Estate Economics, Vol. 40, No. S1 (December 2012): S159-S198. DOI.

Citation Information
Roberto G. Quercia, Anthony Pennington-Cross and Chao Yue Tian. "Mortgage Default and Prepayment Risks among Moderate- and Low-Income Households" Real Estate Economics (2012) ISSN: 1080-8620
Available at: http://works.bepress.com/anthony_pennington_cross/40/