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Impact Of COVID-19 Pandemic on Mortgage Modification and the Probability of Redefault
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Resumo(s)
This study investigates the impact of the COVID-19 pandemic on mortgage modifications and
the probability of redefault. Research aims to understand how pandemic-induced economic
disruptions influenced mortgage holders' ability to maintain modified loan terms. Using logistic
regression models, we analyzed data from a sample of Fannie Mae mortgage loans, comparing
pre-pandemic and pandemic modifications. The results indicated a significant decrease of 27%
in the probability of redefault when the loan is modified after the onset of the pandemic,
highlighting the crucial role the government played in this crisis. The key variables included
original loan terms, credit scores, and debt-to-income ratios. Furthermore, COVID-19 was
found to have a significant effect on variables such as debt-to-income ratio and the modification
of the loan term, when comparing pre and post covid modifications. This study contributes to
the field by providing information on the financial strengths exposed by the pandemic and offers
policy implications for the management of future economic crises. The findings underscore the
robust financial support systems created to mitigate the adverse effects of such unprecedented
events on mortgage stability and the direction that governments should take to expand such
measures.
Descrição
Dissertation presented as the partial requirement for obtaining a Master's degree in Data Science and Advanced Analytics, specialization in Business Analytics
Palavras-chave
COVID-19 mortgage modification redefault probability logistic regression economic impact SDG 10 - Reduced inequalities