Collateral damage: Refinancing constraints and regional recessions

Andrew Caplin; Charles Freeman; Joseph Tracy

doi:10.2307/2953710

Collateral damage: Refinancing constraints and regional recessions

Andrew Caplin, Charles Freeman, Joseph Tracy

Research output: Contribution to journal › Article › peer-review

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 language	English (US)
Pages (from-to)	496-516
Number of pages	21
Journal	Journal of Money, Credit and Banking
Volume	29
Issue number	4
DOIs	https://doi.org/10.2307/2953710
State	Published - Nov 1997

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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10.2307/2953710

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title = "Collateral damage: Refinancing constraints and regional recessions",

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.",

author = "Andrew Caplin and Charles Freeman and Joseph Tracy",

year = "1997",

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Collateral damage: Refinancing constraints and regional recessions

Abstract

ASJC Scopus subject areas

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