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UID:20251017T180733EDT-85933Zv8l2@132.216.98.100
DTSTAMP:20251017T220733Z
DESCRIPTION:Kian Samaee (Penn)\n	Date: January 28\, 2020\n	Time and Location:
  10:00 a.m.\, Leacock 429\n\nAbstract:\n	Many US mortgage borrowers do not 
 refinance\, despite seemingly having financial incentives to do so. We exp
 lore the role of search costs in explaining this inaction\, focusing on th
 e 2009-2015 period when mortgage rates declined significantly. We estimate
  a (dynamic) discrete choice model of refinancing and search decisions usi
 ng a proprietary panel data set\, which includes information on the sequen
 ce of refinancing decisions and search intensity (the number of mortgage i
 nquiries). We find that search costs significantly inhibit refinancing thr
 ough two channels. First\, higher search costs directly increase the cost 
 of refinancing. Second\, they also indirectly increase loan originators’ m
 arket power and thus raise the offered refinance rates. We find that the i
 ndirect market power effect dominates. We use our model to study an altern
 ative market design\, in which a centralized refinance market replaces the
  current decentralized one. We find\, under specific assumptions\, a centr
 alized refinance market can significantly increase refinancing activities 
 by eliminating market power\, even if we keep the refinancing costs unchan
 ged.\n
DTSTART:20200128T150000Z
DTEND:20200128T163000Z
LOCATION:Leacock 429\, Leacock Building\, CA\, QC\, Montreal\, H3A 2T7\, 85
 5 rue Sherbrooke Ouest
SUMMARY:Kian Samaee (Penn)\, 'Inaction\, Search Costs\, and Market Power in
  the US Mortgage Market'
URL:/economics/channels/event/kian-samaee-penn-inactio
 n-search-costs-and-market-power-us-mortgage-market-308940
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