Added May 2, 2015
2 min
How Does Working in a Financial Profession Affect Mortgage Delinquency?
Abstract
This paper uses a dataset from one of the leading subprime lenders in America, containing detailed information on borrower and loan characteristics, finds that borrowers from the financial industry, who have higher financial literacy, are less likely to default. This effect cannot be explained by borrower characteristics such as income and education, loan terms, property characteristics, or geographic effects. We also find there are variations in this effect of financial literacy for different types of borrowers or different kinds of loans. Our results indicate that financial literacy plays an important part in repayment behavior and have helpful policy implications.
JEL Classification
D10, R20, G01, G21
Suggested Citation
Agarwal, Sumit and Chomsisengphet, Souphala and Zhang, Yunqi, How Does Financial Literacy Affect Mortgage Default? (April 30, 2015). Available at SSRN: https://ssrn.com/abstract=2601025 or http://dx.doi.org/10.2139/ssrn.2601025
Partners
Chomsisengphet, S., and Y. Zhang
Newsletter
Subscribe to my newsletter for new updates!