Securitization and Mortgage Renegotiation: Evidence from the Great Depression

Review of Financial Studies

37 Pages Posted: 4 Feb 2011 Last revised: 24 Nov 2011

See all articles by Andra C. Ghent

Andra C. Ghent

University of Utah - David Eccles School of Business

Date Written: January 14, 2011

Abstract

We use loan level data from the NYC metropolitan area to examine the extent to which lenders attempted to prevent foreclosures with concessionary modifications during the Great Depression. We find no principal forgiveness in the sample and only a handful of concessionary mortgage modifications of other types. Far more mortgages terminated through foreclosure than received any sort of concessionary modification. The results indicate that there are significant impediments to renegotiation of residential mortgages beyond securitization. As such, less renegotiation seems unlikely to be a major cost of securitization of residential mortgages.

Suggested Citation

Ghent, Andra C., Securitization and Mortgage Renegotiation: Evidence from the Great Depression (January 14, 2011). Review of Financial Studies, Available at SSRN: https://ssrn.com/abstract=1754142

Andra C. Ghent (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

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