Determinants Of Mortgage Delinquency

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William Brent
Lynne Kelly
Debby Lindsey-Taliefero
Russell Price


Real estate financing, foreclosures and mortgage lending


This paper examines mortgage delinquency rates for loans in each state and Washington, DC from 2004 through 2009 in order to gain insight into the key factors that drive residential mortgage delinquency.  Models are estimated for 30-day, 60-day, 90-day, 90+ day, and all delinquency rates.  Prime and subprime loans are modeled separately in cross-sectional time series regressions.  The findings suggest that borrower income, type of loan, and the general health of the economy remain important in determining delinquency risk.  Also, factors that determine 30- and 60-day delinquency rates differ from those that determine 90-day and 90+ day delinquency rates.  In addition, factors that determine prime delinquency rates differ from those that determine subprime delinquency rates.  Finally, borrower race does not consistently explain delinquency rates.     


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