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Discussion Paper
Balances Are on the Rise—So Who Is Taking on More Credit Card Debt?
Haughwout, Andrew F.; Lee, Donghoon; Mangrum, Daniel; Scally, Joelle; Van der Klaauw, Wilbert (2022-11-15)
Total household debt balances continued their upward climb in the third quarter of 2022 with an increase of $351 billion, the largest nominal quarterly increase since 2007. This rise was driven by a $282 billion increase in mortgage balances, according to the latest Quarterly Report on Household Debt & Credit from the New York Fed’s Center for Microeconomic Data. Mortgages, historically the largest form of household debt, now comprise 71 percent of outstanding household debt balances, up from 69 percent in the fourth quarter of 2019. An increase in credit card balances was also a boost to ...
Liberty Street Economics , Paper 20221115b

Working Paper
Owner-Occupancy Fraud and Mortgage Performance
Elul, Ronel; Tilson, Sebatian; Payne, Aaron (2019-12-17)
We use a matched credit bureau and mortgage dataset to identify occupancy fraud in residential mortgage originations, that is, borrowers who misrepresented their occupancy status as owner-occupants rather than residential real estate investors. In contrast to previous studies, our dataset allows us to show that – during the housing bubble – such fraud was broad based, appearing in the government-sponsored enterprise market and in loans held on bank portfolios as well, and increases the effective share of investors by 50 percent. We show that a key benefit of investor fraud was obtaining a ...
Working Papers , Paper 19-53

Discussion Paper
Auto Loan Delinquency Revs Up as Car Prices Stress Budgets
Haughwout, Andrew F.; Lee, Donghoon; Mangrum, Daniel; Scally, Joelle; Van der Klaauw, Wilbert; Wang, Crystal (2024-02-06)
The New York Fed’s Center for Microeconomic Data released the Quarterly Report on Household Debt and Credit for the fourth quarter of 2023 this morning. Household debt balances grew by $212 billion over the last quarter. Although there was growth across most loan types, it was moderate compared to the fourth-quarter changes seen in the past few years. Mortgage balances grew by $112 billion and home equity line of credit (HELOC) balances saw an $11 billion bump as borrowers tapped home equity in lieu of refinancing first mortgages. Credit card balances, which typically see substantial ...
Liberty Street Economics , Paper 20240206

Working Paper
The Rise and Fall of Consumption in the 2000s
Demyanyk, Yuliya; Hryshko, Dmytro; Sorensen, Bent E.; Luengo-Prado, Maria Jose (2015-05-21)
U.S. consumption has gone through steep ups and downs since the turn of the millennium, but the causes of these fluctuations are still imperfectly identified. We quantify the relative impact on consumption growth of income, unemployment, house prices, credit scores, debt, expectations, foreclosures, inequality, and refinancings for four subperiods: the ?dot-com recession? (2001-2003), the ?subprime boom? (2004-2006), the Great Recession (2007-2009), and the ?tepid recovery? (2010-2012). We document that the explanatory power of different factors varies by subperiods, implying that a ...
Working Papers (Old Series) , Paper 1507

Working Paper
Who Provides Credit in Times of Crisis? Evidence from the Auto Loan Market
Canals-Cerda, Jose J.; Lee, Brian Jonghwan (2025-02-05)
We examine the contribution of different lending channels to the auto loan market in times of crisis. Specifically, we explore lending from traditional banks, credit unions, and finance companies (nonbanks) over the past two decades, with an emphasis on the Great Recession and the COVID-19 pandemic. We find that banks provided weak support during the pandemic, thus losing market share and continuing the trend that emerged following the Great Recession. Nonbank market share during this period grew most significantly for subprime borrowers and in counties with stronger bank dependence. Survey ...
Working Papers , Paper 25-06

Working Paper
Social Capital and Mortgages
An, Xudong; El Ghoul, Sadok; Guedhami, Omrane; Levine, Ross; Roman, Raluca (2023-10-12)
Using comprehensive mortgage-level data, we discover that the social capital of the community in which households live positively influences the likelihood of the approval of their mortgage applications, the terms of approved mortgages, and the subsequent performance of those mortgages. The results hold when conditioning on extensive household and community characteristics and a battery of fixed effects, including individual effects, data permitting, and when employing instrumental variables and propensity score matching to address identification and selection concerns. Concerning causal ...
Working Papers , Paper 23-23

Working Paper
The Effects of Competition in Consumer Credit Markets
Yu, Edison; Gissler, Stefan; Ramcharan, Rodney (2018-10-23)
Using changes in financial regulation that create exogenous entry in some consumer credit markets, we find that increased competition induces banks to become more specialized and efficient, while deposit rates increase and borrowing costs for riskier collateral decline. However, shadow banks change their credit policy when faced with more competition and aggressively expand credit to riskier borrowers at the extensive margin, resulting in higher default rates. These results show how the form of intermediation can shape economic fluctuations. They also suggest that increased competition can ...
Working Papers , Paper 18-24

Working Paper
End of the Line: Behavior of HELOC Borrowers Facing Payment Changes
Johnson, Kathleen W.; Sarama, Robert F. (2015-07-10)
An important question in the household finance literature is whether a change in required debt payments affects borrower behavior. One challenge in this literature has been identifying whether higher default rates observed after an increase in debt payments stem from the inability of borrowers to pay the higher amount, or the attrition of better borrowers in advance of the payment change. A related question is whether the higher default rate is a result of specific features of the debt product, or the type of borrower who chooses the product. We address both of these questions as they relate ...
Finance and Economics Discussion Series , Paper 2015-73

Biden Student Loan Relief Plan Allows Increased Borrowing, Less Repayment
Di, Wenhua (2022-09-27)
The Biden plan is expected to boost participation in the income-driven repayments that lower the payment burden. Imposing a cap on a borrower’s income to qualify for cancellation or increasing the cancellation amount for low-income borrowers could alleviate the regressive nature of broad loan cancellation.
Dallas Fed Economics

Working Paper
Financial Consequences of Severe Identity Theft in the U.S.
Blascak, Nathan; Cheney, Julia S.; Hunt, Robert M.; Mikhed, Vyacheslav; Ritter, Dubravka; Vogan, Michael (2021-12-02)
We examine how a negative shock from severe identity theft affects consumer credit market behavior in the United States. We show that the immediate effects of severe identity theft on credit files are typically negative, small, and transitory. After those immediate effects fade, identity theft victims experience persistent increases in credit scores and declines in reported delinquencies, with a significant proportion of affected consumers transitioning from subprime-to-prime credit scores. Those consumers take advantage of their improved creditworthiness to obtain additional credit, ...
Working Papers , Paper 21-41

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