Kristopher Gerardi, Kyle F. Herkenhoff, Lee E. Ohanian, and Paul S. Willen. Working Paper 2013-4 (August). Although job loss and negative equity both loom large in a homeowner’s decision to default, the authors use household-level data to find that a household’s employment status is the strongest predictor of defaults. They also find that the vast majority of homeowners who default do not have enough liquid assets to make a single monthly mortgage payment, which calls into question the significance of strategic default in the mortgage market.