We show that commercial mortgage borrowers behave opportunistically to attempt to obtain principal reductions. We develop a model in which lenders cannot perfectly observe borrowers’ use values and renegotiation is costly. We then exploit a tax rule change that reduced the cost of renegotiation. Consistent with the model predictions, borrowers with high private use values of the property are more likely to transfer into special servicing when lenders have a higher capacity to negotiate principal reductions after the rule change. Our results suggest adverse consequences of principal forgiveness for lenders. (JEL E44, G14, G51)

中文翻译：

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模仿游戏：鼓励重新谈判如何让好借款人变得不好


我们表明，商业抵押贷款借款人会采取投机行为，试图获得本金减少。我们开发了一种模型，在该模型中，贷款人无法完全观察借款人的使用价值，并且重新谈判的成本很高。然后，我们利用税收规则的变化来降低重新谈判的成本。与模型预测一致，当贷款人在规则变更后有更强的谈判本金减少的能力时，拥有较高财产私人使用价值的借款人更有可能转向特殊服务。我们的研究结果表明，本金减免对贷方会产生不利后果。 (JEL E44、G14、G51)