Boston Fed blames subprime on house price decline
In conducting what it calls "the first rigorous assessment of the homeownership experiences of subprime borrowers", the Boston Federal Reserve has found that the decline in house prices that began in the summer of 2005 is the factor most responsible for the dramatic rise in foreclosures during 2006 and 2007.
By analysing homeownership experiences in Massachusetts from 1989 to 2007 using a competing risks proportional hazard framework, the Boston Fed found that 20% of subprime mortgages end in
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