Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/120839
Authors: 
Chan, Sewin
Haughwout, Sewin
Hayashi, Andrew
van der Klaauw, Wilbert
Year of Publication: 
2015
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 732
Abstract: 
The mortgage default decision is part of a complex household credit management problem. We examine how factors affecting mortgage default spill over to other credit markets. As home equity turns negative, homeowners default on mortgages and HELOCs at higher rates, whereas they prioritize repaying credit cards and auto loans. Larger unused credit card limits intensify the preservation of credit cards over housing debt. Although mortgage non-recourse statutes increase default on all types of housing debt, they reduce credit card defaults. Foreclosure delays increase default rates for both housing and non-housing debts. Our analysis highlights the interconnectedness of debt repayment decisions.
Subjects: 
mortgage default
state foreclosure law
consumer finance
JEL: 
D12
D14
G1
K10
Document Type: 
Working Paper

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