Abstract

http://ssrn.com/abstract=2070188
 
 

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Preventing Strategic Default


Brent T. White


University of Arizona - James E. Rogers College of Law

October 12, 2012

Arizona Journal of International and Comparative Law, 2012
Arizona Legal Studies Discussion Paper No. 12-18

Abstract:     
Strategic default is driven in significant part by homebuyers’ expectations at the time of purchase. When individuals purchase homes primarily as investments, with the expectation of appreciation, they will experience marked anxiety when home prices decline. A significant number of homeowners will strategically default as a result. In addition, when investment rationales motivate the majority of homebuyers within a given market, housing booms will tend to be exaggerated and down markets will tend to be prolonged. Strategic default – and housing booms and busts – can be managed by setting homebuyers’ expectations ex ante at the time of purchase.

Number of Pages in PDF File: 29

Keywords: strategic default, anxiety, expectations, homebuyers

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Date posted: May 30, 2012 ; Last revised: October 12, 2012

Suggested Citation

White, Brent T., Preventing Strategic Default (October 12, 2012). Arizona Journal of International and Comparative Law, 2012; Arizona Legal Studies Discussion Paper No. 12-18. Available at SSRN: http://ssrn.com/abstract=2070188

Contact Information

Brent T. White (Contact Author)
University of Arizona - James E. Rogers College of Law ( email )
P.O. Box 210176
Tucson, AZ 85721-0176
United States
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