How Are They Now? A Checkup on Homeowners Who Experienced Foreclosure

Posted: 10 May 2024

See all articles by Andrew Haughwout

Andrew Haughwout

Federal Reserve Bank of New York

Donghoon Lee

Federal Reserve Bank of New York; New York University

Daniel Mangrum

Federal Reserve Banks - Federal Reserve Bank of New York

Belicia Rodriguez

Federal Reserve Banks - Federal Reserve Bank of New York

Joelle Scally

Federal Reserve Bank of New York

Wilbert van der Klaauw

Federal Reserve Bank of New York; IZA

Date Written: May 8, 2024

Abstract

The end of the Great Recession marked the beginning of the longest economic expansion in U.S. history. The Great Recession, with its dramatic housing bust, led to a wave of home foreclosures as overleveraged borrowers found themselves unable to meet their payment obligations. In early 2009, the New York Fed’s Research Group launched the Consumer Credit Panel (CCP), a foundational data set of the Center for Microeconomic Data, to monitor the financial health of Americans as the economy recovered. The CCP, which is based on anonymized credit report data from Equifax, gives us an opportunity to track individuals during the period leading to the foreclosure, observe when a flag is added to their credit report and then—years later—removed. Here, we examine the longer-term impact of a foreclosure on borrowers’ credit scores and borrowing experiences: do they return to borrowing, or shy away from credit use and homeownership after their earlier bad experience?

To view post: https://libertystreeteconomics.newyorkfed.org/2024/05/how-are-they-now-a-checkup-on-homeowners-who-experienced-foreclosure/

Keywords: Consumer Credit Panel (CCP), household finance, foreclosure, housing

JEL Classification: G5

Suggested Citation

Haughwout, Andrew F. and Lee, Donghoon and Mangrum, Daniel and Rodriguez, Belicia and Scally, Joelle and van der Klaauw, H. Wilbert, How Are They Now? A Checkup on Homeowners Who Experienced Foreclosure (May 8, 2024). Liberty Street Economics , Available at SSRN: https://ssrn.com/abstract=4824166

Andrew F. Haughwout

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2685 (Phone)
212-720-1844 (Fax)

Donghoon Lee

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-8699 (Phone)
212-720-1844 (Fax)

New York University

NY
United States

Daniel Mangrum

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Belicia Rodriguez

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Joelle Scally (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

H. Wilbert Van der Klaauw

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-5916 (Phone)
212-720-1844 (Fax)

IZA ( email )

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