The effect of neighborhood contagion on mortgage selection
AbstractIn this paper we conduct an empirical investigation of how neighborhood mortgage adoption contagion affects mortgage product choice, with an emphasis on Hispanic borrowers. We use loan-level mortgage data for metropolitan areas in California and Florida during 2004 and 2005, the peak years of the subprime mortgage boom. We identify an important and statistically significant effect of contagion on consumer choice of hybrid mortgage products that were popular during this period, especially for Hispanic borrowers.
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2011-036.
Date of creation: 2011
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