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SPEA Professor presents research at national conference

October 10, 2009

Conference Presenters

Assistant Professor Ashlyn Nelson recently presented her research on mortgage delinquency at a conference co-sponsored by the Payment Cards Center and the Research Department at the Federal Reserve Bank of Philadelphia. The seminar was the fifth in a series of joint research conferences focusing on issues related to consumer credit and payments. The forum brought together academic researchers and industry experts to present research ranging from securitization and distressed loan renegotiation to data breaches and identity theft. A total of 70 papers were submitted and only seven pieces of research, both theoretical and empirical, were chosen to be presented at the conference.

Nelson’s research, entitled Liar’s Loan? Effects of Organization Channel and Information Falsification on Mortgage Delinquency, utilizes data pulled from a major national mortgage bank to formulate a comprehensive predictive model of mortgage delinquency. The paper focuses on two major areas of concern underlying the mortgage crisis: agency issues between the bank and mortgage brokers that result in lower quality broker-originated loans and issues between banks and borrowers that results in information falsification by borrowers also referred to as “liar loans.” The research also highlights significant differences in loan performance by race/ethnicity that cannot be extensively explained by observations such as risk factors or loan pricing.

Nelson’s areas of interests include includes housing finance, education finance, education policy and the mortgage crisis. She worked alongside Wei Jiang of Columbia University and Edward Vytlacil of Yale University on this project.

To view a summary of the conference or to view Nelson’s presentation, please visit: http://www.philadelphiafed.org/payment-cards-center/publications/update-newsletter/2009/fall/fall09_04.cfm.