Biography
Sebastian Tilson is an AI product manager whose research on U.S. mortgage markets has been cited by The Economist, The Wall Street Journal, and Bloomberg among others. His paper Owner-Occupancy Fraud and Mortgage Performance, co-authored with Ronel Elul and Aaron Payne, was published in Real Estate Economics in 2023 and grew out of his work at the Federal Reserve Bank of Philadelphia.
He holds an MS in Applied Statistics from Villanova University and a BA in Mathematics from Haverford College. He lives with his family in the Philadelphia area.
Research
When someone takes out a mortgage to buy a home, they have to tell the lender whether they plan to live in it. The answer matters: “primary residence” mortgages come with lower interest rates, smaller down payments, and easier credit terms than mortgages for investment properties. So there’s a real incentive to lie.
My co-authors and I set out to measure how often that lie actually happens. Using matched credit bureau and mortgage data covering hundreds of thousands of loans, we identified borrowers who claimed to be moving into a home but never actually moved. What we found surprised us: roughly one in three borrowers in the U.S. mortgage market who behave like investors are hiding behind owner-occupant labels. The fraud isn’t a relic of the 2008 housing bubble — it persists in mortgages originated through 2017, the end of our data. It shows up across loans backed by Fannie Mae and Freddie Mac, in bank portfolios, and in private securitizations alike.
These borrowers default at a 75% higher rate than investors who told the truth. And their defaults are more likely to be “strategic” — walking away from underwater properties they could afford to keep paying — which means they pose an outsized risk to the housing market when prices fall.
Selected Press
- The Economist Meet America’s Disguised Property Investors August 2023
- The Wall Street Journal Can A Person Ever Legally Have Mortgages For More Than One Primary Residence? August 2025
- Bloomberg Fed Found Over 22,000 Mortgages Like Those Pulte Is Flagging August 2025
Contact
For media inquiries or research questions, email Sebastian.Tilson@gmail.com.