New York Economic Review

Who Defaults on their Home Mortgage?

Eric Doviak and Sean MacDonald

vol. 43, Fall 2012, p. 75-98

Since Feb. 13, 2010, detailed information on every home mortgage default and foreclosure in New York State must be filed with the New York State Department of Financial Services (DFS). The data come from pre-foreclosure filing (PFF) notices that mortgage servicers must send to both the borrower and the DFS 90 days prior to initiating the foreclosure process and when a foreclosure has commenced. Pairing the PFF data with data on originations from the Home Mortgage Disclosure Act (HMDA) reveals the race and ethnicity of borrowers who defaulted on their home mortgages. HMDA analyses consistently reveal strong racial and ethnic disparities in lending practices. Our analysis shows that the same disparities reappear in the default data (i.e the PFF data), which suggests that lending disparities contributed to the higher default rates that we observe among black and Latino borrowers. Our analysis also suggests that labor market recovery would do the most to reduce the rate of mortgage default.

suggested citation:

Eric Doviak and Sean MacDonald. "Who Defaults on their Home Mortgage?." New York Economic Review. vol. 43, Fall 2012, p. 75-98

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