Collateral damage: Refinancing constraints and regional recessions

Andrew Caplin, Charles Freeman, Joseph Tracy

    Research output: Contribution to journalArticle

    Abstract

    In the current structure of the U.S. residential mortgage market, a decrease in property values may make it very difficult for homeowners to refinance their mortgages to take advantage of declining interest rates. In this paper, we show that this form of collateral constraint has greatly reduced refinancing in states with depressed property markets. We outline the interaction between regional recessions and refinancing constraints.

    Original languageEnglish (US)
    Pages (from-to)496-516
    Number of pages21
    JournalJournal of Money, Credit and Banking
    Volume29
    Issue number4
    DOIs
    StatePublished - 1997

    Fingerprint

    Damage
    Recession
    Refinancing
    Interest rates
    Property values
    Interaction
    Collateral constraint
    Property market
    Mortgages
    Mortgage market

    ASJC Scopus subject areas

    • Accounting
    • Finance
    • Economics and Econometrics

    Cite this

    Collateral damage : Refinancing constraints and regional recessions. / Caplin, Andrew; Freeman, Charles; Tracy, Joseph.

    In: Journal of Money, Credit and Banking, Vol. 29, No. 4, 1997, p. 496-516.

    Research output: Contribution to journalArticle

    Caplin, Andrew ; Freeman, Charles ; Tracy, Joseph. / Collateral damage : Refinancing constraints and regional recessions. In: Journal of Money, Credit and Banking. 1997 ; Vol. 29, No. 4. pp. 496-516.
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