amit seru::Mukherjee sorin capital management, llc december 25, 2008 a central question surrounding the current subprime crisis is whether the securitization process reduced the incentives of financial intermediaries to carefully screen borrowers amit seru

amit seru::Mukherjee sorin capital management, llc december 25, 2008 a central question surrounding the current subprime crisis is whether the securitization process reduced the incentives of financial intermediaries to carefully screen borrowers.
We empirically examine this issue using a unique dataset on securitized subprime mortgage loan contracts in the united states.
We conduct additional analyses to rule out selection on the part of borrowers, lenders, or investors as alternative explanations.
Our findings suggest that existing securitization practices did adversely affect the screening incentives of lenders.
Number of pages in pdf file: keywords: securitization, screening, incentives, subprime, defaults, mortgages, disintermediation, subprime crisis, consumer credit jel classifications: