Original source: SimoleonSense.com .
Synopsis (Via Physorg)
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.
Interesting Excerpts (Via Physorg)
Conversely, married borrowers in their 30s with multiple children who earn more modest incomes, a range between $40,000 and $80,000, and live in older, more established neighbors located near city centers are more likely to default, the researchers say.
“This tells us that lifestyle is a more important determinant in the calculation of the probability of mortgage failure than is income,” Andreas Rauterkus says. “Someone may have the income the pay off their mortgage, but if other lifestyle attitudes or views are considered, a borrower simply may choose to stop paying the mortgage in certain circumstances.”
“Neighborhoods matter,” Stephanie Rauterkus says. “Neighborhoods typically are made up of residents in similar life stages with similar lifestyle outlooks that make certain neighborhoods more susceptible to default trends than others.
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