Cornell University

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AEP Seminar: A Crisis of Missed Opportunities? Foreclosure Costs and Mortgage Modification..., Stuart Gabriel

Tuesday, May 15, 2018 at 2:00pm to 3:30pm

Warren Hall, B75

AEP Seminar, Warren Hall

Stuart Gabriel (UCLA Anderson School of Management)

A Crisis of Missed Opportunities? Foreclosure Costs and Mortgage Modification During the Great Recession

Abstract:  We investigate the housing and broader economic effects of the 2000s crisis-period California Foreclosure Prevention Laws (CFPLs). The CFPLs encouraged lender mortgage modifications by substantially increasing the pecuniary and time costs of foreclosure. Results show that the CFPLs prevented 124,000 California foreclosures, increased house prices by 6.2 percent, and created $310 billion of housing wealth. Findings further indicate that gains in housing wealth translated into increased durable consumption. Disaggregated estimates reveal that the CFPL house price increases were markedly higher in the hard-hit areas of Southern California. Altogether, the CFPLs were highly effective in mitigating foreclosures and stabilizing housing markets.

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Event Type

Seminar

Departments

Cornell SC Johnson College of Business, Dyson School of Applied Economics and Management

Tags

Dyson, Dyson School, EconERU

Contact E-Mail

sms237@cornell.edu

Contact Name

Sue Snyder

Contact Phone

607-254-8856

Speaker

Stuart Gabriel

Speaker Affiliation

UCLA Anderson School of Management

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