Document Type


Publication Date


Source Publication

Journal of Real Estate Finance and Economics

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This paper examines what happens to mortgages in the subprime mortgage market once foreclosure proceeding are initiated. A multinomial logit model that allows for the interdependence of the possible outcomes or risks (cure, partial cure, paid off, and real estate owned) through the correlation of associated unobserved heterogeneities is estimated. The results show that the duration of foreclosures is impacted by many factors including contemporaneous housing market conditions, the prior performance of the loan (prior delinquency), and the state-level legal environment.


Accepted version. Journal of Real Estate Finance and Economics, Vol. 40, No. 2 (February 2010): 109-129. DOI. © Springer Publishing Company 2010. Used with permission.