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Securitization and Mortgage Renegotiation: Evidence from the Great Depression

We use loan-level data from the New York City metropolitan area to examine the extent to which lenders attempted to prevent foreclosures with concessionary modifications during the Great Depression. We find no principal forgiveness in the sample and only a handful of concessionary mortgage modificat...

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Published in:	The Review of financial studies 2011-06, Vol.24 (6), p.1814-1847
Main Author:	Ghent, Andra C.
Format:	Article
Language:	English
Subjects:	Bank loans Commercial banks Economic crisis Financial history Foreclosure Foreclosures Great Depression Insurance providers Lenders Life insurance Loan rates Loans Mortgage credit Mortgage loans Mortgage markets Mortgages New York Real estate Real estate market Renegotiation Securitization Studies U.S.A Urban areas
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description	We use loan-level data from the New York City metropolitan area to examine the extent to which lenders attempted to prevent foreclosures with concessionary modifications during the Great Depression. We find no principal forgiveness in the sample and only a handful of concessionary mortgage modifications of other types. Far more mortgages terminated through foreclosure than received any sort of concessionary modification. The results indicate that there are significant impediments to renegotiation of residential mortgages beyond securitization. As such, less renegotiation seems unlikely to be a major cost of securitization of residential mortgages.
doi_str_mv	10.1093/rfs/hhr017
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source	EconLit s plnými texty; EBSCOhost Business Source Ultimate; International Bibliography of the Social Sciences (IBSS); JSTOR Archival Journals and Primary Sources Collection【Remote access available】; Oxford Journals Online
subjects	Bank loans Commercial banks Economic crisis Financial history Foreclosure Foreclosures Great Depression Insurance providers Lenders Life insurance Loan rates Loans Mortgage credit Mortgage loans Mortgage markets Mortgages New York Real estate Real estate market Renegotiation Securitization Studies U.S.A Urban areas
title	Securitization and Mortgage Renegotiation: Evidence from the Great Depression
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