Plausibly Exogenous [1580] - Lender Incentives (05/31/2024)

LHS Variable
Lender's incentives to foreclose on defaulting mortgages

RHS Variable
Concentration of outstanding debt

Source of Exogenous Variation
Variation induced by mergers of non-failing large banks to instrument the share of mortgages retained in a neighborhood

- Favara and Giannetti (2017), “Forced asset sales and the concentration of outstanding debt: Evidence from the mortgage market”