Collateral damage: Refinancing constraints and regional recessions

Andrew Caplin, Charles Freeman, Joseph Tracy

    Research output: Contribution to journalArticlepeer-review


    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
    Issue number4
    StatePublished - Nov 1997

    ASJC Scopus subject areas

    • Accounting
    • Finance
    • Economics and Econometrics


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