USU grad student pinpoints factors in mortgage default and foreclosure


It’s the cornerstone of the American dream. From a one-bedroom cottage to a sprawling mansion, having four walls and a roof to one’s name is a symbol of success, stability, and self-sufficiency.

“Most people have the goal of home ownership,” said Camille Pedersen, a recent USU master’s graduate from the Department of Family, Consumer, and Human Development.  “There’s something special about having a place to call your own and knowing that it’s yours.”

That’s why Pedersen has been working to understand why that dream sometimes slips through people’s fingers.  Through mortgage default and, later, foreclosure, the ability for some people to keep a home can be elusive, and heart-breaking.

“There should be some type of trigger point of why this happens,” said Pedersen.  “I wanted to find out what that was.”

As a USU undergrad, Pedersen completed her bachelor’s degree in family finance, a major which she described as a perfect fit for her budget-minded personality.  She also spent time focusing on financial planning and counseling at USU’s Family Life Center.

During her graduate studies, however, Pedersen’s focus shifted as she became familiar with the research of her mentor, Dr. Lucy Delgadillo, who was studying factors relating to home ownership and foreclosure in Cache Valley, Utah.

“The idea of home ownership really interested me, and I wanted to take the research one step further,” said Pedersen.  “We looked at different neighborhoods in Weber County, Utah, to see what the characteristics were of the areas with the highest levels of mortgage default.  This has been done before in Cache Valley, but I also checked to see what effect, if any, minority populations had on those neighborhoods as well.”

Pedersen’s study examined the housing, demographic, and economic characteristics of neighborhoods with high levels of mortgage default.  To do this, she matched the defaulted properties in Weber County to their respective census tracts.  She then used the census data to correlate the demographic characteristics.

“There were basically two types of neighborhoods where mortgage default occurred,” said Pedersen.  “The first had few minorities, newer and more expensive homes with higher levels of vacancies.  People that lived in the first market also had more second mortgages, home equity loans, self-employment, and dependents.  The second market had more minorities and fewer dependents, older and less expensive homes, and fewer second mortgages and home equity loans.”

Pedersen believes that the results show that mortgage default prevention efforts should be targeted to the needs of the specific population.

“We know now, though, that we could target at-risk neighborhoods, and teach strategies that fit each of the two types of markets,” says Pedersen.

Pedersen’s research will be published in the Family Consumer Sciences Research Journal this year.  In the meantime, Pedersen is considering putting her research results to work.

“I would love to teach, even on the community level,” said Pedersen.  “It would be great to put the recommendations from the research findings into practice.”

Pedersen looked at different neighborhoods in Weber County, Utah, to see what the characteristics were of the areas with the highest levels of mortgage default.