Tην Παρασκευή 8 Δεκεμβρίου 2017 (ώρα 17:15-18:00 μμ, ΠΑΜ2) θα δώσει διάλεξη στο πλαίσιο του Κύκλου Σεμιναρίων 2017-2018 του ΠΜΣ του Τμήματος Οικονομικών Επιστημών του Πανεπιστημίου Πατρών ο κος. Δημήτριος Στάϊκος (PhD University of Buffalo, US) με θέμα "Housing Price Uncertainty and Mortgage Default".
Abstract: Mortgage defaults are a common occurrence and can have a devastating impact on the entire economy, as it has been observed during the last recession. The literature has long identified declines in income, declines in housing prices or a combination of both as the most common sources of mortgage default. In this paper we focus on declining housing prices as the trigger of default and we develop a partial equilibrium framework in which the mortgage borrowing rate is determined endogenously. Our goal is to analyze the effects declining housing prices have of default decisions under different savings interest rates, down payment requirements, consumer income levels and post default options available to homeowners. Our findings indicate that reducing the rate of default is beneficial to homeowners and the most effective way to achieve this is through minimum down payment requirements. Alternatively, increasing transaction costs associated with default can deter homeowners form defaulting. Finally, we find that reducing interest rates, a tool utilized by the Federal Reserve Bank to contain the recent mortgage crisis, may not be as effective and may actually lead to opposite than intended effects.