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Research Seminars & Workshops @ IRES

Household Savings and Mortgage Default

Dr Hoonsuk Park
Fisher College of Business
The Ohio State University

Date: 8 November (Tuesday)
Time: 4.00pm - 5.30pm
Venue: DRE Meeting Room @ DRE General Office, SDE1 #03-03
Chair: Prof Deng Yongheng

Hoonsuk Park is a Ph.D. in Finance Candidate at The Ohio State University. He holds a B.A. in Business Administration from Korea University. Hoonsuk is a financial economist currently working in the fields of real estate and household finance. His research covers household savings behavior and how it is related to mortgage delinquencies. Before joining the Ph.D. program at Ohio State, he worked at the Export-Import Bank of Korea as a loan officer.

Abstract of paper:
This paper studies the effect of the household’s lack of liquid assets on mortgage default. Using administrative data from banking and credit card transactions, I find that a significant number of households lack liquid assets, and that these households are more likely to default on their mortgages. The effect of the lack of liquid assets on mortgage default is amplified during unemployment. When comparing liquid assets with income, I find that high income households that lack liquid assets are more likely to default on their mortgages compared to low-income households that have more savings. Finally, households that lack liquid assets reduce consumption dramatically during the period in which they default on their mortgages. These findings have implications for mortgage default theory and consumption theory.

For more information please contact IRES at 6516 8288 or 6516 6947

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