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  • LI Wenli (2)
  • CHAPELLE Guillaume (1)
  • URVOY Camille (1)
  • BONO Pierre-Henri (1)
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The state of Nevada passed a legislature in 2009 that abolished deficiency judgments for purchase mortgage loans made after October 1, 2009 and collateralized by primary single family homes. In this paper, we study lenders’ mortgage lending and households’ mortgage application and subsequent default decisions in response to the law change. Using unique mortgage loan level application and performance data, we find strong evidence that lenders tightened their lending standards. In particular, lenders reduced approval rates and loan sizes for affected mortgages after the implementation of the law. Households, by contrast, did not delay their mortgage applications till after the law change. Furthermore, the law change does not appear to have affected borrowers’ default decisions. These results thus cast a cautionary note on the effectiveness of policy recommendations that intend to use deficiency laws to curb mortgage defaults.

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This paper estimates a lifecycle model of consumption, housing choice and migration in the presence of aggregate and regional shocks, using the Survey of Income and Program Participation (SIPP). Using the model I estimate the value of the migration option and the welfare impact of policies that may restrict mobility. The option to move is equivalent to 4.4% of lifetime consumption. I also find that, were the mortgage interest-rate deduction to be eliminated, the aggregate migration rate would increase only marginally by 0.1%. Following a general equilibrium correction, house prices are reduced by 5%, which results in a 1% increase in home ownership. In a new steady state the elimination of the deduction is equivalent to an increase of 2.4% of lifecycle consumption.

Publication date 2015-12
HALKET Jonathan
NESHEIM Lars
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Using the English Housing Survey, we estimate a supply side selection model of the allocation of properties to the owner-occupied and rental sectors. We find that location, structure and unobserved quality are important for understanding housing prices, rents and selection. Structural characteristics and unobserved quality are important for selection. Location is not. Accounting for selection is important for estimates of rent-to-price ratios and can explain some puzzling correlations between rent-to-price ratios and homeownership rates. We interpret this as strong evidence in favor of contracting frictions in the rental market likely related to housing maintenance.

in Journal of Urban Economics Publication date 2017-09
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The state of Nevada passed legislation in 2009 that abolished deficiency judgments for purchase mortgage loans made after October 1, 2009, and collateralized by primary single-family homes. In this paper, we study how this change in the law affected equilibrium mortgage lending. Using unique mortgage loan-level application data and a difference-in-differences approach that exploits the qualification criterion, we find that the law change led to a decline in equilibrium loan sizes of about 1 to 2 percent. There exists some evidence that mortgage approval rates also decreased for the affected loan applications. These results suggest that making the deficiency judgment law more default friendly in Nevada generated material cost on borrowers at the time of mortgage origination.

Afin d’évaluer l’impact socio-économique de la mise en service du Grand paris Express (GPE), la Société du Grand Paris (SGP) a commandé une étude permettant d’étudier les effets de ces nouvelles infrastructures de transport sur les marchés du travail et du logement. Le LIEPP propose dans ce rapport (qui est une version d’étape d’un travail de recherche toujours en cours) un modèle d’analyse des relations entre la structure des loyers dans l’agglomération, les créations d’emploi et le niveau du chômage d’équilibre. Ce modèle constitue un cadre théorique original pour répondre à cette demande. Les paramètres clefs de ce modèle ont été estimés grâce à des données de l’agglomération parisienne collectées à cette fin. Ce cadre théorique vise, d’une part, à simplifier le calcul des créations d’emplois induites dans une « équation unique » et, d’autre part, à identifier le rôle des différentes hypothèses de travail sur l’impact économique des infrastructures de transport. L’approche de modélisation innove par rapport à la littérature existante en ce qu’elle est conçue pour décrire un marché du logement explicitement dual, représentant ainsi plus précisément l’agglomération parisienne que les modèles urbains existants.