Securitisation limits debt renegotiations: Chicago Fed paper
A Chicago Federal Reserve paper published on Thursday says securitsation of mortgages limits the opportunities for renegotiating distressed debt.
Sumit Agarwal, Gene Amromin, Itzhak Ben-David, Souphala Chomsisengphet, and Douglas Evanoff, the paper's authors, study the effects of securitisation on renegotiation of distressed residential mortgages during the financial crisis.
The results show that securitisation reduces the likelihood of renegotiation and increases the likelihood of foreclosure
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