The Effect of Principal Reduction on Household Distress: Evidence from Mortgage Cramdown
利用法官随机分配案件，研究最高法院禁止抵押贷款减记前后，破产保护对止赎的影响减半，表明本金减免通过减少债务积压显著降低房主困境。
Abstract Mortgage cramdown enabled bankruptcy judges to discharge the underwater portion of a mortgage in a chapter 13 bankruptcy until the Supreme Court disallowed this practice in 1993. We investigate the impact of mortgage cramdown on household distress exploiting the random assignment of cases to judges. The impact of bankruptcy protection on foreclosures is reduced by more than half after the Supreme Court disallowed cramdown. Our results suggest that large principal reductions considerably decrease homeowners’ distress by reducing debt overhang.