Servicers and Mortgage-Backed Securities Default: Theory and Evidence

Brent W. Ambrose, Anthony B. Sanders, Abdullah Yavas

Research output: Contribution to journalArticle

11 Scopus citations

Abstract

We study conflicting incentives of the master and special servicers in handling troubled loans in a Commercial Mortgage-Backed Securities deal and how the frictions between the interests of the two servicers might be diminished if the master and special servicing rights are held by the same firm. We show that concentrating both servicing rights in one firm reduces the likelihood that a defaulted loan terminates in foreclosure.

Original languageEnglish (US)
Pages (from-to)462-489
Number of pages28
JournalReal Estate Economics
Volume44
Issue number2
DOIs
StatePublished - Jun 1 2016

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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