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We study the role of mortgage servicers in implementing the CARES Act mortgage forbearance program during the COVID-19 pandemic. Despite universal eligibility, around one-third of the nonperforming federally-backed loans in our sample fail to enter into forbearance. The relative frequency of these "missing" forbearances varies significantly across servicers for observably similar loans, with small servicers and nonbanks, and especially nonbanks with small liquidity buffers, having a lower propensity to provide forbearance. The incidence of forbearance-related complaints by borrowers is also higher for these servicers. We also use servicer-level variation to estimate the causal effect of forbearance on borrower outcomes. Assignment to a "high-forbearance" servicer translates to a significant increase in the probability of nonpayment, which moves essentially 1:1 with the forbearance probability. Part of this additional household liquidity is used to pay down high-cost credit card debt.

Market concentration (HHI) based antitrust policy can be vulnerable to mismeasurement of substitutability. We provide evidence demonstrating this vulnerability in the banking industry, and argue that HHI-based bank antitrust review can be improved by incorporating a determinant of substitutability between merging banks: the proximity of their branch networks. Using difference-in-differences to estimate the effects of bank mergers, we find that mergers of close-proximity banks lead to more branch closures and to repositioning that is less beneficial for consumer access. Moreover, although rivals offer worse interest rates (prices) after close-proximity mergers, the merging parties' deposit growth (quantity) declines. These results hold for transactions that evade HHI-based enforcement criteria. Our findings also inform antitrust policy for other industries where firms’ locations are an important and observable determinant of substitutability.

We study the role of mortgage servicers in implementing the CARES Act mortgage forbearance program during the COVID-19 pandemic. Despite universal eligibility, we document that a significant number of federally backed mortgage borrowers become delinquent during the pandemic without successfully entering into a forbearance program, and that the relative frequency of these "missing'' forbearances varies significantly across mortgage servicers for otherwise identical loans. Forbearance outcomes are systematically related to servicer characteristics including size, liquidity and organizational form, consistent with the role of economic incentives in shaping servicer behavior. We also use servicer-level variation in forbearance outcomes to estimate the causal effect of forbearance on borrower outcomes. We find that assignment to a "high-forbearance" servicer translates to a significantly higher non-payment rate, and we find evidence that part of this additional household liquidity is used to pay down high-cost credit card debt.

This paper studies government and private marketing activities in the context of the Affordable Care Act health insurance marketplace. Using detailed TV advertising data, we present evidence that government and private advertising are targeted to different geographical areas and provide different messaging content. Then, we estimate the impacts of government and private advertising on consumer demand by exploiting discontinuities in advertising along the borders of local TV markets. We find that government advertising has a market-expansion effect and enhances welfare. We also find that private advertising is not more effective than government advertising in increasing total program enrollment. Although private advertising is still effective in increasing insurer’s own enrollment, it does not have positive spillovers to other insurers but has a modest business-stealing effect. We then develop and estimate an equilibrium model of marketplaces to illustrate mechanisms through which government advertising affects the market equilibrium. Our simulation suggests that government advertising can simultaneously increase total program enrollment and reduce excessive advertising spending among private insurers.

We study the trading of dealers around new bond issues underwritten by their affiliates using a complete matched record of U.S. bond market transactions, bond issue deals, and underwriter ownership structure from 2005 to 2015. Compared to dealers unaffiliated with the lead underwriter, affiliated dealers pay up to 54 basis points more for the issuer's preexisting bonds—prior to, during, and after the issuance event. We interpret this phenomenon as cross-security price support and, prior to the event, price maneuvers aimed at lowering the reference yield for new issue investors. By examining dealer inventories and profits, we find no support for alternative explanations such as hedging, informed trading, or competitive advantage in market-making.