The Cost of Foreclosure Delay

41 Pages Posted: 26 Oct 2015

See all articles by Larry Cordell

Larry Cordell

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Liang Geng

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Laurie S. Goodman

The Urban Institute - Housing Finance Policy Center

Lidan Yang

Amherst Securities Group LP

Date Written: Winter 2015

Abstract

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.

Suggested Citation

Cordell, Larry and Geng, Liang and Goodman, Laurie S. and Yang, Lidan, The Cost of Foreclosure Delay (Winter 2015). Real Estate Economics, Vol. 43, Issue 4, pp. 916-956, 2015. Available at SSRN: https://ssrn.com/abstract=2679170 or http://dx.doi.org/10.1111/1540-6229.12107

Larry Cordell (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Liang Geng

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Laurie S. Goodman

The Urban Institute - Housing Finance Policy Center ( email )

2100 M Street NW
Washington, DC 20037
United States

Lidan Yang

Amherst Securities Group LP ( email )

United States

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