Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20693
Authors: 
Diaz-Serrano, Luis
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion paper series 1396
Abstract: 
We investigate the socio-economic determinants of mortgage delinquency in 12 EU countries and observe that income volatility significantly increases the mortgage delinquency risk. This pattern even holds for borrowers with higher-income profiles if volatility in income is high enough. From this result we can draw the following conclusions: i) mortgage protection insurance policies might be failing to cover those borrowers most in need; ii) the existence of credit market imperfections, and; iii) the inability for a number of borrowers most at income risk to accumulate precautionary savings in order to meet mortgage payments when shocks in income arise.
Subjects: 
income volatility
mortgage delinquency
mortgage insurance
homeownership
payment-to-income ratio
credit market imperfections
JEL: 
J0
R0
D1
Document Type: 
Working Paper

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