BizJournals Portfolio
Dec 04 2007 12:00am EDT

Subprime Paper of the Day

Kristopher Gerardi, Adam Hale Shapiro, and Paul Willen of the Boston Fed:

This paper provides the first rigorous assessment of the homeownership experiences of subprime borrowers... We present two main findings. First, homeownerships that begin with a subprime purchase mortgage end up in foreclosure almost 20 percent of the time, or more than 6 times as often as experiences that begin with prime purchase mortgages. Second, house price appreciation plays a dominant role in generating foreclosures.

(Via Research Recap)

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