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Liar's Loans, Mortgage Fraud, and the Great Recession.
- Source :
-
Review of Political Economy . Oct2019, Vol. 31 Issue 4, p479-508. 30p. 8 Charts, 4 Graphs. - Publication Year :
- 2019
-
Abstract
- This paper contributes to research on misrepresentation in private residential mortgage-backed securities by using new data on losses from foreclosure to estimate higher than expected losses associated with income overstatement and adverse selection in no/low documentation loans, using full documentation loans as a counterfactual. Overall, no/low documentation loans account for $350 billion of the $500 billion lost from 2007 to 2012. No/low documentation loans lost an additional $5200 per loan, implying $97 billion of total no/low documentation losses were higher than expected. I also find underwriting exceptions differentially predict loss by documentation type, which provides evidence consistent with originator-led adverse selection. [ABSTRACT FROM AUTHOR]
- Subjects :
- *MORTGAGE fraud
*RESIDENTIAL mortgage-backed securities
*LOANS
*RECESSIONS
Subjects
Details
- Language :
- English
- ISSN :
- 09538259
- Volume :
- 31
- Issue :
- 4
- Database :
- Academic Search Index
- Journal :
- Review of Political Economy
- Publication Type :
- Academic Journal
- Accession number :
- 144691990
- Full Text :
- https://doi.org/10.1080/09538259.2020.1747746