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Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk

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  • Posey, Lisa L.
  • Yavas, Abdullah

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  • Posey, Lisa L. & Yavas, Abdullah, 2001. "Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk," Journal of Urban Economics, Elsevier, vol. 49(1), pages 54-79, January.
    • Handle: RePEc:eee:juecon:v:49:y:2001:i:1:p:54-79
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    22. Brueckner, Jan K., 1992. "Borrower mobility, self-selection, and the relative prices of fixed- and adjustable-rate mortgages," Journal of Financial Intermediation, Elsevier, vol. 2(4), pages 401-421, December.
    23. Alm, James & Follain, James R., 1984. "Alternative Mortgage Instruments, the Tilt Problem, and Consumer Welfare," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 19(1), pages 113-126, March.
    24. Schwartz, Eduardo S & Torous, Walter N, 1992. "Prepayment, Default, and the Valuation of Mortgage Pass-through Securities," The Journal of Business, University of Chicago Press, vol. 65(2), pages 221-239, April.
    25. Bester, Helmut, 1985. "Screening vs. Rationing in Credit Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 75(4), pages 850-855, September.
    26. Dwight M. Jaffee & Thomas Russell, 1976. "Imperfect Information, Uncertainty, and Credit Rationing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 651-666.
    27. Titman, Sheridan, 1992. "Interest Rate Swaps and Corporate Financing Choices," Journal of Finance, American Finance Association, vol. 47(4), pages 1503-1516, September.
    28. Brueckner, Jan K & Follain, James R, 1988. "The Rise and Fall of the ARM: An Econometric Analysis of Mortgage Choice," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 93-102, February.
    29. Chari, V V & Jagannathan, Ravi, 1989. " Adverse Selection in a Model of Real Estate Lending," Journal of Finance, American Finance Association, vol. 44(2), pages 499-508, June.
    30. Kau, James B. & Keenan, Donald C. & Muller, Walter III & Epperson, James F., 1987. "The valuation and securitization of commercial and multifamily mortgages," Journal of Banking & Finance, Elsevier, vol. 11(3), pages 525-546, September.
    31. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
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    Cited by:

    1. Christian Weller & Kate Sabatini, 2007. "The Financial Vulnerability of Families," Challenge, Taylor & Francis Journals, vol. 50(3), pages 72-98.
    2. Jan K. Brueckner & Paul S. Calem & Leonard I. Nakamura, 2016. "House‐Price Expectations, Alternative Mortgage Products, and Default," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(1), pages 81-112, February.
    3. Jan K. Brueckner & Kangoh Lee, 2014. "Optimal Risk-Sharing in Mortgage Contracts: The Effects of Potential Prepayment and Default," CESifo Working Paper Series 4979, CESifo.
    4. Danny Ben-Shahar, 2008. "Default, Credit Scoring, and Loan-to-Value: a Theoretical Analysis under Competitive and Non-Competitive Mortgage Markets," Journal of Real Estate Research, American Real Estate Society, vol. 30(2), pages 161-190.
    5. Dungey, Mardi & Doko Tchatoka, Firmin & Yanotti, María B., 2018. "Using multiple correspondence analysis for finance: A tool for assessing financial inclusion," International Review of Financial Analysis, Elsevier, vol. 59(C), pages 212-222.
    6. Sung Hyun Kim, 2019. "Two-Dimensional Self-Selection of Borrowers," Korean Economic Review, Korean Economic Association, vol. 35, pages 125-161.
    7. Lisa L. Posey & Paul D. Thistle, 2017. "Automobile Insurance and Driver Ability: Contract Choice as a Screening Mechanism," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 42(2), pages 141-170, September.
    8. Lisa L. Posey & Paul D. Thistle, 2017. "Automobile Insurance and Driver Ability: Contract Choice as a Screening Mechanism," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 42(2), pages 141-170, September.
    9. Jane K. Dokko & Brian M. Doyle & Skander J. van den Heuvel & Michael T. Kiley & Jinill Kim & Shane M. Sherlund & Jae W. Sim, 2009. "Monetary policy and the housing bubble," Finance and Economics Discussion Series 2009-49, Board of Governors of the Federal Reserve System (U.S.).
    10. Kate Sabatini & Christian E. Weller, 2007. "Changes in Homeowners’ Financial Security during the Recent Housing and Mortgage Boom," Working Papers wp125, Political Economy Research Institute, University of Massachusetts at Amherst.
    11. Sumit Agarwal & Brent W. Ambrose, 2008. "Does it pay to read your junk mail? evidence of the effect of advertising on home equity credit choices," Working Paper Series WP-08-09, Federal Reserve Bank of Chicago.
    12. Ahn, Kwangwon & Forsyth, Joetta & Jang, Hanwool & Kim, Dongshin, 2022. "Fixed rate mortgages: The cost of interest rate risk aversion," Finance Research Letters, Elsevier, vol. 44(C).
    13. Agarwal, Sumit & Ambrose, Brent W. & Chomsisengphet, Souphala & Liu, Chunlin, 2006. "An empirical analysis of home equity loan and line performance," Journal of Financial Intermediation, Elsevier, vol. 15(4), pages 444-469, October.
    14. Anthony Pennington‐Cross & Giang Ho, 2010. "The Termination of Subprime Hybrid and Fixed‐Rate Mortgages," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(3), pages 399-426, September.
    15. Kathleen W. Johnson & Geng Li, 2014. "Are Adjustable-Rate Mortgage Borrowers Borrowing Constrained?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 42(2), pages 457-471, June.
    16. Wojakowski, Rafal M. & Ebrahim, M. Shahid & Shackleton, Mark B., 2016. "Reducing the impact of real estate foreclosures with Amortizing Participation Mortgages," Journal of Banking & Finance, Elsevier, vol. 71(C), pages 62-74.
    17. Danny Ben-Shahar, 2006. "Screening Mortgage Default Risk: A Unified Theoretical Framework," Journal of Real Estate Research, American Real Estate Society, vol. 28(3), pages 215-240.
    18. David Harrison & Michael Seiler, 2015. "The Paradox of Judicial Foreclosure: Collateral Value Uncertainty and Mortgage Rates," The Journal of Real Estate Finance and Economics, Springer, vol. 50(3), pages 377-411, April.
    19. Alexei Tchistyi & Tomasz Piskorski, 2008. "Stochastic House Appreciation and Optimal Mortgage Lending," 2008 Meeting Papers 938, Society for Economic Dynamics.
    20. Gaudêncio, João & Mazany, Agnieszka & Schwarz, Claudia, 2019. "The impact of lending standards on default rates of residential real estate loans," Occasional Paper Series 220, European Central Bank.
    21. Gregory E. Elliehausen & Min Hwang, 2010. "Mortgage contract choice in subprime mortgage markets," Finance and Economics Discussion Series 2010-53, Board of Governors of the Federal Reserve System (U.S.).
    22. Shi, Xinyan & Riley, Sarah F., 2014. "Mortgage choice, house price externalities, and the default rate," Journal of Housing Economics, Elsevier, vol. 26(C), pages 139-150.
    23. Arnold, Lutz G. & Babl, Andreas, 2014. "Alas, my home is my castle: On the cost of house ownership as a screening device," Journal of Urban Economics, Elsevier, vol. 81(C), pages 57-64.
    24. Jan K. Brueckner & Stuart S. Rosenthal, 2022. "Tenant Riskiness, Contract Length, and the Term Structure of Commercial Leases," CESifo Working Paper Series 10189, CESifo.

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