ESSAYS ON MORTGAGE DEFAULT AND MODIFICATION
ZHANG YUNQI
ZHANG YUNQI
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Abstract
THE THESIS FOCUSES ON ISSUES RELATED TO MORTGAGES. MORTGAGE ACCOUNTS FOR A SUBSTANTIAL PART OF THE BOND MARKETS AND PLAYED AN IMPORTANT ROLE IN THE GLOBAL FINANCIAL CRISIS STARTING AT THE END OF THE 2007. MY RESEARCH STUDIES MORTGAGE DEFAULT AND RENEGOTIATION FROM THE PERSPECTIVE OF LENDERS, BORROWERS AND REGULATORS.
CHAPTER 2 STUDIES THE EFFECTS OF DEBT INSURANCE ON THE LIKELIHOOD OF DEBT RENEGOTIATION WITH THE SETTING OF MORTGAGES. MORTGAGE INSURANCE ENABLES MORTGAGE HOLDERS TO POTENTIALLY GET COMPENSATION FOR THE LOSS IN MORTGAGE INVESTMENT RESULTING FROM BORROWER?S DEFAULT AND SUBSEQUENT LIQUIDATION. IF A MORTGAGE LOAN BECOMES DELINQUENT, THE BORROWER MAY APPLY FOR MORTGAGE MODIFICATION. ACCORDING TO MORAL HAZARD THEORY, MORTGAGE HOLDERS ARE LESS LIKELY TO ACCEPT MORTGAGE MODIFICATION IF MORTGAGES ARE GUARANTEED BY MORTGAGE INSURANCE, BECAUSE THEIR LOSS CAN BE PAID BY THE INSURANCE COMPANY. I EMPIRICALLY TEST THIS EFFECT USING DATASETS INCLUDING DETAILED INFORMATION OF MORTGAGE O
Keywords
Mortgage, Default, Modification, Insurance, Liquidity, Financial Literacy
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Date
2015-08-05
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Thesis