there is a “stigma” foreclosure discount whereby REO properties sell at lower prices simply because they have been involved … in foreclosure proceedings. To the extent that such a discount exists, arbitrage opportunities exist and the associated … market failure has significant policy implications. We examine the foreclosure discount from a different perspective than …

Since the housing market collapse of 2008 and the ensuing economic recession were amplified by rising foreclosure rates … regime. We find that elimination of the mortgage interest tax deduction reduces the foreclosure rate by 12.4 percent …

The aim of the study is to explain if the foreclosure effect on prices is explained by a lower quality of foreclosed … estimate the impact of foreclosure on home prices in Florida and Indiana from 2000 to 2008. We employ a model of housing demand …-specific quality explains the vast majority of the foreclosure effects on house prices. Our results also show that foreclosed homes in …

words, the authorities cannot effectively use foreclosure strategies to influence the housing market without considering …

match the homeownership rate, the average foreclosure rate, and the lower tail of the distribution of home-equity ratios … facts. We then use the model to account for the foreclosure crisis in terms of three shocks: overbuilding, financial … frictions, and foreclosure delays. The financial friction shock accounts for much of the decline in house prices, while the …

We estimate a model of house prices, combined loan-to-value ratios (CLTVs), and trade and foreclosure behavior. House …