A homeowner's station in life and personal spending beliefs and habits are important indicators of the borrower's potential for home-mortgage default, say researchers in the University of Alabama at Birmingham (UAB) School of Business.

"Our research has shown that a borrower's personal traits and behaviors have considerable influence on their willingness and ability to repay a mortgage loan and avoid foreclosure," says Stephanie Rauterkus, Ph.D., UAB assistant professor of finance.

"Traditionally, the industry has focused on default pressures like income, credit scores or loan-to-home-value ratios, but our research has shown that borrowers who may look identical by these traditional measures could have very different default probabilities based on their behavioral characteristics," she says.

For more information, please visit main.uab.edu/Sites/MediaRelations/articles/72593/

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