Mortgage Default Risks and the 1971 San Fernando Earthquake |
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| Authors: | Dan R. Anderson Maurice Weinrobe |
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| Affiliation: | Department of Actuarial Science, Risk and Insurance, Graduate School of Business, University of Wisconsin, Madison, Wisconsin 53706.;Department of Economics, Clark University, 950 Main Street, Worchester, Massachusetts 01610. |
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| Abstract: | The paper is based on a study of mortgage default risks associated with natural disasters. These risks are faced by holders of mortgages when forced by default to acquire damaged properties. A sample of residential mortgage properties damaged in the 1971 San Fernando, California earthquake is studied. Some of the mortgagors defaulted while others did not. The paper identifies and analyzes those variables associated with default using discriminant and probit regression analysis. The study concentrates on earthquake exposures in California, but has implications for all major disasters. |
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