Evidence on the effect of credit counseling on mortgage loan default by low-income households

摘要: Abstract Research on the effectiveness of credit counseling is surprisingly scarce given its widespread use and that it has been around for at least three decades. This paper studies effects default by adopting an option-based approach to mortgage termination. Data come from a program developed as result collaborative efforts large Midwest bank, Community Churches, local community development company implemented during 1992–1996 period. We find some evidence counseled borrowers defaulted less often than non-counseled affects optimal exercise option.