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Saturday, April 24, 2010

Obvious research from the Harvard Business School

Who Selected Adjustable-Rate Mortgages? Evidence from the 1989-2007 Surveys of Consumer Finances" Free Download
Harvard Business School Finance Working Paper No. 10-083

DANIEL BERGSTRESSER, Harvard Business School
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JOHN BESHEARS, National Bureau of Economic Research (NBER)
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We find evidence that households selecting adjustable-rate mortgages (ARMs) during the recent decade were disproportionately those who were less suspicious or who may have had difficulty understanding complicated ARM features that became commonplace prior to the financial crisis.