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The Cost of Foreclosure Delay
Author(s) -
Cordell Larry,
Geng Liang,
Goodman Laurie S.,
Yang Lidan
Publication year - 2015
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12107
Subject(s) - foreclosure , economics , government (linguistics) , sample (material) , timeline , financial crisis , actuarial science , business , finance , macroeconomics , statistics , linguistics , philosophy , chemistry , mathematics , chromatography
We measure the cost of foreclosure delay by estimating time‐related foreclosure costs using a large national sample of residential mortgages before, during, and after the recent U.S. housing crisis. The large volume of foreclosures, coupled with an unprecedented series of government interventions in mortgage servicing practices, significantly extended foreclosure timelines during and after the crisis. Costs were especially pronounced in judicial review states, which saw average foreclosure costs go up 15 percentage points, 24 percentage points in the highest cost state. Cost increases of this magnitude are likely to have consequences for servicing practices and mortgage credit availability.