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Full-Text Articles in Law
The Trillion Dollar Problem Of Underwater Homeowners: Avoiding A New Surge Of Foreclosures By Encouraging Principal-Reducing Loan Modifications, Gregory S. Crespi
The Trillion Dollar Problem Of Underwater Homeowners: Avoiding A New Surge Of Foreclosures By Encouraging Principal-Reducing Loan Modifications, Gregory S. Crespi
Faculty Journal Articles and Book Chapters
There are currently well over ten million underwater homeowners whose mortgage obligations exceed the current value of their houses, with an aggregate negative equity position of at least $800 billion and possibly over $1 trillion. The overwhelming majority of these persons continue to make their mortgage payments even though for many their interests would be better served by defaulting. This is therefore an unstable situation that could suddenly erupt with a rapid cascade of millions of strategic defaults, potentially triggering severe macroeconomic dislocations. It is urgent that this situation be defused through the modification of the mortgages of a large …
Mortgage Modification And Strategic Behavior: A Contrarian Reading Of The Countrywide Financial Corporation Settlement, Gregory S. Crespi
Mortgage Modification And Strategic Behavior: A Contrarian Reading Of The Countrywide Financial Corporation Settlement, Gregory S. Crespi
Faculty Journal Articles and Book Chapters
Christopher Mayer, Edward Morrison, Thomas Piskorski and Arpit Gupta of Columbia University have recently published in the Law and Finance eJournal a comprehensive study demonstrating the significant impacts on strategic default rates of the widely publicized Countrywide Financial Corporation settlement of 2008. While their study is a solid and convincing descriptive effort, their implicit assumption that strategic defaults are something to be discouraged rather than encouraged, a position that I have criticized in my earlier work, undercuts the usefulness of their work for policy guidance. From their perspective the Countrywide settlement provides a cautionary tale about difficult trade-offs to be …
Mortgage Modification And Strategic Behavior: A Contrarian Interpretation Of The Countrywide Financial Corporation Settlement, Gregory S. Crespi
Mortgage Modification And Strategic Behavior: A Contrarian Interpretation Of The Countrywide Financial Corporation Settlement, Gregory S. Crespi
Faculty Journal Articles and Book Chapters
Christopher Mayer, Edward Morrison, Thomas Piskorski and Arpit Gupta of Columbia University have recently published in the Law and Finance eJournal a comprehensive study demonstrating the significant impacts on strategic default rates of the widely publicized Countrywide Financial Corporation settlement of 2008. While their study is comprehensive and carefully done, their implicit assumption that strategic defaults are something to be discouraged rather than encouraged, a position that I have criticized in my earlier work, undercuts the usefulness of their work for policy guidance. From their perspective the Countrywide settlement provides a cautionary tale about difficult trade-offs to be faced in …