Since February 2010, detailed information on every home mortgage default and foreclosure in New York State must be ﬁled with the New York State Banking Department (NYSBD). The data enables us to identify the ﬁnancial characteristics that make a defaulted borrower more (or less) likely to enter the foreclosure process. Our analysis of the NYSBD data suggests that borrowers in default who took larger loans are more likely to progress to foreclosure. It also suggests that reducing principal balances may reduce the foreclosure rate, but might have an adverse effect on the mortgage industry. Given the frequent criticism of the Home Affordable Modiﬁcation Program (HAMP), it is no surprise that defaulted borrowers whose mortgages were modiﬁed via HAMP progress to a lis pendens ﬁling a higher rate than defaulted borrowers without a modiﬁcation or with a non-HAMP modiﬁcation. After controlling for delinquency length (and other factors) however, we ﬁnd that the HAMP program may have been effective in helping defaulted borrowers avoid foreclosure.
MacDonald, Sean P. and Doviak, Eric, "Who Enters the Foreclosure Process?" (2011). CUNY Academic Works.