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Abstract
The first essay focuses on mortgage servicer behavior with regard to delinquent mortgage loans, and the second one concentrates on the impact of spatial mismatch of affordable housing and jobs on the labor outcomes of vulnerable groups.In the first essay, I examine the decision of mortgage servicers to foreclose, modify, or take no action when managing delinquent loans on behalf of an investor/guarantor. It further explores if the geographic concentration of the loan holdings of the investor/guarantor influences the servicers decision. Foreclosing on a large number of loans within a geographic area may negatively impact the value of the remaining holdings of the investor/guarantor influencing the decision to take action or not. We specifically explore the servicing of GSE loans - loans guaranteed by Fannie Mae. GSEs play an important role in the mortgage market and analyzing the role of the agency servicers is important to understand mortgage markets as a whole. The results indicate increases in geographic concentration of Fannie loans decrease the probility of foreclosure. As the foreclosure action of non-s Fannie servicers increases, the probability of the non-s Fannie servicer foreclosing on its delinquent loans increases. However, as the foreclosure action of non-Fannie servicers loans increases, the probability of the non-Fannie servicer foreclosing on its delinquent loans decreases.In my second essay, I examine the spatial mismatch hypothesis, which was originally formulated by John Kain (1968), suggests that there is a relationship between the relative spatial distributions of employment and population in a metropolitan area and labor market outcomes. Specifically, the hypothesis posits that labor market outcomes are negatively affected by the divergence of the two distributions. This impact is assumed to be strongest for the least mobile population groups in the metropolitan area. Spatial mismatch has proven to be remarkably persistent over time (Martin (2004)).I pursue one possible explanation for the persistence of spatial mismatch: Jobs could be moving to areas where there are fewer affordable housing units available. If this is the case, then residents who are disadvantaged by employment shifts, will find it harder to move from areas with decreasing job availability to areas experiencing job growth.This paper uses tract-level data on employment and affordable housing units from 2000 to 2010 for 103 U.S. metropolitan statistical areas to document the extent to which jobs have been moving to areas where there are fewer affordable housing units. The results suggest that jobs have been moving away from areas with more affordable housing units and that the shift is stronger for units that are affordable to households with the lowest income. The paper then analyzes whether there is a relationship between the degree to which jobs moved away from affordable housing units and the labor market outcomes of workers from the following four vulnerable groups Black males, Black females, Hispanic males, and Hispanic females. The papers results suggest that there is no evidence that spatial mismatch between affordable housing and jobs contributes to the persistence of poor labor market outcomes of Blacks and Hispanics.