Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240717 
Year of Publication: 
2021
Series/Report no.: 
Working Papers No. 2021-08
Publisher: 
Banco de México, Ciudad de México
Abstract: 
The Home Affordable Modification Program (HAMP) was a loan modification program introduced in 2009, in the U.S., to assist highly indebted homeowners with avoiding foreclosure. This program also encouraged private lenders to offer more sustainable modifications. This paper studies the role of HAMP in preventing higher foreclosures rates during and after the Great Recession, in the context of a general-equilibrium heterogeneous-agents model with two types of households (Borrowers and Savers), uninsurable idiosyncratic risk, and both private and HAMP modifications. The main result is that, without HAMP, the peak in the foreclosure rate could have been 50% larger (3.2 percent vs 2.2 percent in data).
Subjects: 
Housing policy
Heterogeneous agents
Financial Economics
JEL: 
G51
E44
C61
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size
515.08 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.