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What Triggers Mortgage Default? New Evidence from Linked Administrative and Survey Data

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  • David Low

    (Consumer Financial Protection Bureau)

Abstract

Why do homeowners default on mortgages? This paper studies the question using a survey specifically designed for the purpose, with a sample drawn from (and matched to) rich administrative data. I find that a wide variety of typically unobserved liquidity shocks together trigger nearly all defaults, so “strategic” default with no liquidity trigger is much less common than it usually appears. Conversely, even in this uniquely rich data, I find that many foreclosures are not triggered by negative home equity, contrary to the predictions of almost every model in the literature.

Suggested Citation

  • David Low, 2026. "What Triggers Mortgage Default? New Evidence from Linked Administrative and Survey Data," The Review of Economics and Statistics, MIT Press, vol. 108(1), pages 282-290, January.
    • Handle: RePEc:tpr:restat:v:108:y:2026:i:1:p:282-290
    DOI: 10.1162/rest_a_01371
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