The Optimal Response to Default: Renegotiation or Extended Maturity?

This paper reinforces the argument of Harding and Sirmans (2002) that the observed preference of lenders for extended maturity rather than renegotiation of the principle in the case of loan default is due to the superior incentive properties of the former. Specifically, borrowers have a greater incentive to avoid default under extended maturity because it reduces the likelihood that they will be able to escape paying off the full loan balance. Thus, although extended maturity leaves open the possibility of foreclosure, it will be preferred to renegotiation as long as the dead weight loss from foreclosure is not too large.

Minding the 3 R's: Response, Remediation and Restoration

Working with CT DEP, the NOAA Office of Damage Assessment, Remediation and Restoration uses funds recovered from polluters to conduct restoration projects. Here in Connecticut, projects include the Jordan Brook Fishway in Waterford, the Remington Gun Club site at Lordship Point in Stratford, and more.