I just happened to come across an interesting paper about mortgage defaults from Peter Ganong and Pascal J. Noel, “Why Do Borrowers Default on Mortgages?” The results of the paper strengthen the case that the Great Recession caused the housing default crisis rather than the other way around. I will discuss this below. But, the most interesting thing about the paper is something that
You are making it sound like the defaulting borrowers were fine until something happened to them. An alternative narrative is that they were never fine. They got loans that they could not even make the first payment on, regardless of how the economy was doing.
You are making it sound like the defaulting borrowers were fine until something happened to them. An alternative narrative is that they were never fine. They got loans that they could not even make the first payment on, regardless of how the economy was doing.