Document Type

Article

Publication Date

2-2010

Source Publication

Journal of Real Estate Finance and Economics

Abstract

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.

Comments

Originally published in Journal of Real Estate Finance and Economics, Volume 40, No. 2 (February 2010), online at: http://dx.doi.org/10.1007/s11146-008-9124-4