How Do Mortgage Refinances Affect Debt, Default, and Spending? Evidence from HARP
نویسندگان
چکیده
We use quasi-random access to the Home Affordable Refinance Program (HARP) identify causal effect of refinancing into a lower-rate mortgage on borrower balance sheet outcomes. Refinancing substantially reduces default rates mortgages and other debt. also causes borrowers expand their debt instruments, such as auto loans, home equity lines, consumer debts that are proxies for spending. Borrowers appear more constrained ex ante grow these strongly after but pay down credit card balances by more. These have lower take-up opportunity. (JEL G51, G21, E52)
منابع مشابه
How Do Mortgage Refinances Affect Debt, Default, and Spending? Evidence from HARP∗
We use quasi-random access to the Home Affordable Refinance Program (HARP) to identify the causal effect of refinancing a mortgage on borrower balance sheet outcomes. We find that on average, refinancing into a lower-rate mortgage enabled borrowers to cut their default rates on mortgages by around 40% and their rates of serious delinquency on non-mortgage debts by about 25%. Refinancing also ca...
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ژورنال
عنوان ژورنال: American Economic Journal: Macroeconomics
سال: 2021
ISSN: ['1945-7707', '1945-7715']
DOI: https://doi.org/10.1257/mac.20180116