A Search for the Genetic Contributors to Strategic Mortgage Default: The Catechol-O-Methyltransferase (COMT) Gene

Abstract

This study is the first in real estate to identify a specific genetic marker with a significantly greater association for individuals who are more likely to strategically default on their underwater mortgage. The catechol-O-methyltransferase (COMT) gene produces an enzyme that regulates dopamine levels (among many other chemicals) in the prefrontal cortex of the brain. I find that borrowers who have one or two of the “A” alleles (or more formally, the “methionine” allele) are significantly more likely to strategically default than those who possess the “G” (or “valine”) allele. I find no significant association for the DRD4 7-repeater or the 5-HTTLPR markers. My hope is that future researchers will build upon this seminal study to better understand whether borrower strategic defaults are more a function of nature or nurture. Reconciling this difference has tremendous policy implications.