Paper here.
An interesting study on one of the key reasons for the financial meltdown. Still the key is what caused the mortgage bubble. Nice work! 
The main factors underlying the rise in mortgage defaults appear to be declines in house prices and deteriorated underwriting standards, in particular an increase in loan-to-value ratios and in the share of mortgages with little or no documentation of income. Contrary to popular perception, the growth in unconventional mortgages products, such as those with prepayment penalties, interest-only periods, and teaser interest rates, does not appear to be a significant factor in defaults through mid-2008 because borrowers who had problems with these products could refinance into different mortgages. However, as markets realized the extent of the poor underwriting, underwriting standards tightened and borrowers began to face difficulties refinancing; this dynamic suggests that these unconventional products could pose problems going forward.
Contact the Authors:
Chris Mayer, Karen Pence, and Shane M. Sherlund
Christopher J. Mayer is Paul Milstein Professor of Finance and Economics, Columbia Business School, New York, New York. He is also a Research Associate, National Bureau of Economic Research, Cambridge, Massachusetts. cm310@columbia.edu
Karen Pence and Shane M. Sherlund are Senior Economists at the Household and Real Estate Finance Section, Federal Reserve Board, Washington, D.C. Their e-mail addresses are Karen.Pence@frb.gov and Shane.M.Sherlund@frd.gov, respectively.
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