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Key Findings Details

Mortgage Contract Decisions and Mortgage Distress: Family and Financial Life-Cycle Factors
Frank Stafford and Elena Gouskova
WP 2010-225

  • Housing cash flow burden as of 2007 is a strong predictor of subsequent mortgage distress.
  • Aggressive refinancing of homes was greatest in selected urban markets.
  • Many of the problem mortgages were adjustable rate and second mortgages, common in these markets.
  • Mortgage holding of those 65 and older rose from 20 percent in the early 1990s to 30 percent in 2007.
  • All life-cycle groups have experienced adverse outcomes, less so for those over 65.
  • Mortgage difficulties are predictors of reduced overall life satisfaction.