Working Paper: NBER ID: w18311
Authors: Sumit Agarwal; Gene Amromin; Itzhak Bendavid; Souphala Chomsisengphet; Tomasz Piskorski; Amit Seru
Abstract: We evaluate the effects of the 2009 Home Affordable Modification Program (HAMP) that provided intermediaries with sizeable financial incentives to renegotiate mortgages. HAMP increased intensity of renegotiations and prevented substantial number of foreclosures but reached just one-third of its targeted indebted households. This shortfall was in large part due to low renegotiation intensity of a few large intermediaries and was driven by intermediary-specific factors. Exploiting regional variation in the intensity of program implementation by intermediaries suggests that the program was associated with lower rate of foreclosures, consumer debt delinquencies, house price declines, and an increase in durable spending.
Keywords: Home Affordable Modification Program; mortgage renegotiation; foreclosure prevention; debt relief; government intervention
JEL Codes: E60; E65; G18; G21; H3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| HAMP (G21) | mortgage renegotiations (G21) |
| HAMP (G21) | completed foreclosures (G33) |
| HAMP participation (G21) | permanent modifications (Y20) |
| mortgage renegotiations (G21) | completed foreclosures (G33) |
| HAMP participation (G21) | strategic delinquencies (G33) |