Subprime Loan Default Resolutions: Do They Vary Across Mortgage Products and Borrower Demographic Groups?

This paper examines default outcomes for subprime first lien loans during the recent subprime mortgage boom. It conducts this investigation in two phases. The paper first examines factors associated with pre-foreclosure outcomes for subprime mortgages in default. It then examines factors associated with different outcomes for loans that enter foreclosure. These factors include less understood elements such as mortgage product features and borrower demographics. The analysis is based on detailed loan-level data and employs multinomial logit models in a hazard framework. Results show that default resolutions vary with product features and borrower demographics. Adjustable rate and interest-only mortgages, and loans with low- or no-documentation are more likely to enter foreclosure proceedings, and, once in foreclosure, are more likely to become REO. The existence of junior liens increases the probability of the loan remaining in default. Owner-occupancy is associated with lower likelihood of foreclosure initiation and REO, and greater likelihood of curing default. Additionally, default outcomes are impacted by local legal, economic and housing market conditions, and the equity in the home.     

Is neuroaccounting waiting in the wings? An essay

This paper discusses a recently published handbook on neuroeconomics ( and ) and extends the discussion to reasons why this newly emerging discipline should be of interest to behavioral accounting researchers. We evaluate the achieved and potential contribution of neuroeconomics to the study of human economic behavior, and examine what behavioral accounting researchers can learn from neuroeconomics and whether we should expect to see a similar sub-field emerge within behavioral accounting in the near future. We conclude that a separate sub-field within behavioral accounting is not likely in the near future due mostly to practical reasons. However, the behavioral accounting researcher would do well to follow research in this discipline closely, and behavioral accountants in the near future are likely to collaborate with neuroscientists and neuroeconomists on questions of mutual interest.     

How credibility affects eWOM reading: The influences of expertise,trustworthiness, and similarity on utilitarian and social functions

In online information settings, a few people tend to contribute, while the majority of people consume. For this latter group of readers, electronic word of mouth (eWOM) provides information about products or service experiences that rarely are available from manufacturer-controlled sources, which makes this source of information especially helpful. In turn, eWOM influences readers' attitudes, intentions, and behavior. Manufacturers also hope to monitor and positively influence eWOM content, such as by supporting and building brand communities. But eWOM readers might doubt the credibility of information if it is mostly positive, and the usefulness of eWOM information depends on its credibility. This study offers an empirical and theoretical validation of how specific utilitarian and social functions of eWOM affect attitudes toward and intentions to read eWOM. In particular, trustworthiness is the most important credibility dimension; it affects both functions. Perceived expertise also enhances the utilitarian while similarity improves the social function of eWOM.     

Sketchy communication: An experiential exercise for learning about communication in business

To be an effective communicator, students need to learn how to select the appropriate means of communication and be aware of potential obstacles. The model of communication process can be an effective framework for students to understand many pitfalls of the communication process. The described activity enables students to experience communication at different levels of richness (e.g., face to face, instant messaging, email) and with varying levels of feedback and noise. After completing the activity, students will understand the importance of precise, rich messages, seeking and providing feedback, and the difficulties that can occur at every step in communication.