The Effect of Negative Equity on Mortgage Default: Evidence From HAMP’s Principal Reduction Alternative
利用HAMP本金减免替代方案的规则拐点，采用回归拐点设计估计本金减免将季度违约率从3.8%降至3.1%，为政策制定者评估债务减免效果提供依据。
The Home Affordable Modification Program’s (HAMP’s) Principal Reduction Alternative (PRA) is a government-sponsored program to reduce the principal balances and monthly mortgage payments of troubled borrowers. We examine the effect of principal forgiveness on borrowers’ subsequent mortgage default. The program’s rules imply a kink in the relationship between principal forgiveness and a borrower’s initial equity level. Our identification strategy exploits the quasi-experimental variation in principal forgiveness generated by this kink using a regression kink design (RKD), which compares the relationship between initial equity and default on either side of the kink. We estimate that HAMP PRA reduced the quarterly default hazard from <f>$3.8\\%$</f> to <f>$3.1\\%$</f>. Received February 4, 2015; accepted August 2, 2015 by Editor Philip Strahan.