Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Please note that all times are shown in the time zone of the conference. The current conference time is: 13th Aug 2022, 11:30:40am IST

Session Overview
Tenure & Mortages
Friday, 08/July/2022:
9:00am - 10:45am

Session Chair: Brent W. Ambrose, Penn State University, United States of America
Location: Room C

Room in the Arts Building, Trinity College Dublin. Exact details to be confirmed by May 31

External Resource:
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Reverse Mortgage Financial Assessment and Loan Performance

Miller, Joshua

US Department of Housing and Urban Development, United States of America;

In response to major mortgagor demographic and behavioral changes that have contributed to additional risks to the MMIF, the Secretary of Housing and Urban Development determined that certain structural changes were necessary to improve fiscal soundness of the HECM program. One of those improvements, the financial assessment, took effect April 27, 2015. In this analysis we are the first to our knowledge to examine the correlation between borrower financial characteristics collected at the financial assessment and loan performance. The results provide several key insights on credit scores, product type, and prior experiences with paying property taxes.

Consumer Inattention, Disclosures, and the Refinancing Channel

Byrne, Shane2; Devine, Kenneth2; King, Michael3; McCarthy, Yvonne2; Palmer, Christopher1

1MIT, United States of America; 2Central Bank of Ireland; 3Trinity College Dublin;

Despite mandatory disclosures of attractive refinancing opportunities, we replicate findings from other countries that under-refinancing costs mortgage holders in Ireland a significant fraction of income annually. To test for the role of consumer inattention in explaining sluggish refinancing, we partner with a large Irish bank to analyze a field experiment testing disclosure designs sent to 12,000 households. While we find only small effects of disclosure design improvements, a simple reminder letter increases refinancing by 80% from 9% to 16%. To interpret this reminder effect, we extend and estimate a mixture model of inattentive mortgage refinancing to allow for disclosure treatment effects. We find that a reminder decreases the likelihood mortgage holders are inattentive by 15 percentage points from 76% to 61%. A back-of-the-envelope calculation implies that each reminder letter generated an average of 64 EUR of consumption (average of 913 EUR for refinancing households). Our results suggest that reminders could have larger effects on household refinancing than a large rate cut and that reminders could strengthen the refinancing channel and stimulate local consumption even when policy rates are at the zero-lower bound or set in a monetary union.

“The Lucky Ones?” Fintech and Mortgage Lending During the Pandemic

Agarwal, Sumit1; An, Xudong2; Zhang, Calvin2

1National University of Singapore; 2Federal Reserve Bank of Philadelphia, United States of America;

Using the enhanced confidential Home Mortgage Disclosure Act (HMDA) data, we depict the changing landscape of mortgage lending during the COVID-19 pandemic. Preliminary findings include: 1) While the overall mortgage originations grew by 55% in volume from 2019 to 2020 mainly due to the refinance boom, Fintech originators have been the largest winners, increasing their market share by 23 percent in all-loan-type originations and 36 percent in conventional loan originations. 2) Most all Fintech growth is coming from the demand side – more borrowers applied to Fintech while lenders maintained a steady approval rate. In that sense, Fintech are the lucky ones as the pandemic forced borrowers to reduce face-to-face interactions with traditional lenders. 3) In contrast to the prior literature that finds Fintech to mainly target the marginal borrowers, we find Fintech encroached onto the space of traditional lenders during the pandemic. 4) Non-banks also gained market share through aggressive pricing and faster originations. We argue that, overall, the pandemic expedited borrower adoption of technology and the transformation of lending business towards more efficiency.

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