The Postforeclosure Experience of U.S. Households

30 Pages Posted: 18 Jun 2013

See all articles by Raven Molloy

Raven Molloy

Board of Governors of the Federal Reserve System

Hui Shan

Board of Governors of the Federal Reserve System

Date Written: Summer 2013

Abstract

Despite the recent flood of foreclosures on residential mortgages, little is known about what happens to borrowers’ households after their mortgages have been foreclosed. We study the postforeclosure experience of U.S. households using a unique data set based on the credit reports of a large panel of individuals from 1999 to 2010. Although foreclosure considerably raises the probability of moving, the majority of postforeclosure migrants do not end up in substantially less desirable neighborhoods or more crowded living conditions. These results suggest that, on average, foreclosure does not impose an economic burden large enough to severely reduce housing consumption.

Suggested Citation

Molloy, Raven and Shan, Hui, The Postforeclosure Experience of U.S. Households (Summer 2013). Real Estate Economics, Vol. 41, Issue 2, pp. 225-254, 2013. Available at SSRN: https://ssrn.com/abstract=2281002 or http://dx.doi.org/10.1111/j.1540-6229.2012.00344.x

Raven Molloy (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Hui Shan

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States
(202) 452 3491 (Phone)
(202) 728 5887 (Fax)

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