Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5090057 | Journal of Banking & Finance | 2012 | 17 Pages |
Abstract
This paper offers evidence on the design of subprime mortgages as bridge-financing products. We show that the viability of subprime mortgages was uniquely predicated on the appreciation of house prices over short horizons. High rates of early prepayments on subprime mortgages suggest the use of prepayments as an exit option. This paper argues that high early defaults on post-2004 originations can be explained when one considers high early prepayment rates for pre-2004 originations.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Geetesh Bhardwaj, Rajdeep Sengupta,