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Chapel Hill, United States

Freeman A.,Center for Community Capital | Harden J.J.,University of Colorado at Boulder
Housing Policy Debate | Year: 2015

Using data from a panel study of low- and moderate-income homeowners, we assess the determinants of the use of several types of down payment assistance and the effect of using assistance on mortgage performance. Although we find differences in reliance on types of assistance, we find no difference in mortgage performance between those who used assistance and those who did not. Based on these findings, we urge caution in imposing down payment requirements that disproportionately restrict access to mortgage credit. © 2014, © 2014 Virginia Polytechnic Institute and State University.

Lindblad M.R.,Center for Community Capital | Quercia R.G.,Center for Community Capital | Wang L.,Center for Community Capital | Zhao H.,Center for Community Capital
Housing Policy Debate | Year: 2015

Filing for bankruptcy is the primary legal mechanism by which homeowners in foreclosure can exert control over ownership of their home, yet little is known about the interplay among bankruptcy types, mortgage servicers, state foreclosure laws, and home foreclosure auctions. We analyze 4,280 lower-income homeowners in the United States who were more than 90 days late paying their 30-year fixed-rate mortgages. Two dozen organizations serviced these mortgages and initiated foreclosure between 2003 and 2012. We identify wide variation between mortgage servicers in their likelihood of bringing a property to auction. We also show that when homeowners in foreclosure filed for bankruptcy, foreclosure auctions were 70% less likely. Chapters 7 and 13 filings both reduce the hazard of auction, but the effect is 5 times greater for Chapter 13, which contains enhanced tools to preserve homeownership. Bankruptcy's effects are strongest in states that permit power-of-sale foreclosure or withdraw homeowners' right-of-redemption at the time of auction. © 2013 Virginia Polytechnic Institute and State University.

Lindblad M.R.,Center for Community Capital | Riley S.F.,Center for Community Capital
Housing Studies | Year: 2015

Loan modifications and foreclosure sales are two ways mortgage servicers can respond when homeowners fall behind on house payments. We investigate the consequences of these events for health and stress by linking longitudinal survey data with administrative mortgage performance data that identify those survey participants who experienced a foreclosure sale, a loan modification, or neither. We find that between 2008 and 2013, loan modifications and foreclosure sales were both associated with a reduction in the stress of house payments, while foreclosure sales alone were associated with a reduction in the stress of home maintenance. Beyond these property-related stressors, the changes in survey participants' self-reported sense-of-control and mental, physical, and general health are most associated with transitions in employment, income, marital status, and residential quality rather than with loan modifications or foreclosure sales. These findings run counter to prevailing research, yet they inform the debate over how to address problems that arise when homeowners become delinquent on mortgages. © 2015 Taylor & Francis.

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