[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/fip/fedfcr/y2009p7-42nv.5no.1.html
   My bibliography  Save this article

The accumulation of foreclosed properties: trajectories of metropolitan REO inventories during the 2007–2008 mortgage crisis

Author

Listed:
  • Daniel Immergluck
Abstract
In addition to causing financial and social hardship to families and individuals, high foreclosure rates can have negative effects on neighborhoods, cities, and metropolitan regions. One key concern among policymakers and community developers is the extent to which lender-owned homes, often called real estate owned or REO properties, accumulate in different local housing markets. The neighborhood and community impacts of foreclosure are expected to be worse if foreclosed properties sit vacant for significant periods of time and are not absorbed back into the market in some productive way. The inventory of REO properties in a local housing market or submarket may become not just a symptom of housing market decline but an impediment to recovery. An increasing amount of REO inventory in a local or regional housing market may discourage price stabilization and the return of even moderate levels of home purchase activity and financing.

Suggested Citation

  • Daniel Immergluck, 2009. "The accumulation of foreclosed properties: trajectories of metropolitan REO inventories during the 2007–2008 mortgage crisis," Community Development Innovation Review, Federal Reserve Bank of San Francisco, issue 1, pages 07-42.
    • Handle: RePEc:fip:fedfcr:y:2009:p:7-42:n:v.5no.1
    as

    Download full text from publisher

    File URL: https://www.frbsf.org/community-development/wp-content/uploads/sites/3/vol5_issue1-1.pdf
    File Function: Full Text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kristopher Gerardi & Adam Hale Shapiro & Paul S. Willen, 2007. "Subprime outcomes: risky mortgages, homeownership experiences, and foreclosures," Working Papers 07-15, Federal Reserve Bank of Boston.
    2. Anthony Pennington-Cross, 2006. "The Value of Foreclosed Property," Journal of Real Estate Research, American Real Estate Society, vol. 28(2), pages 193-214.
    3. Dan Immergluck & Geoff Smith, 2006. "The external costs of foreclosure: The impact of single‐family mortgage foreclosures on property values," Housing Policy Debate, Taylor & Francis Journals, vol. 17(1), pages 57-79.
    4. Schuetz, Jenny & Been, Vicki & Ellen, Ingrid Gould, 2008. "Neighborhood effects of concentrated mortgage foreclosures," Journal of Housing Economics, Elsevier, vol. 17(4), pages 306-319, December.
    5. Michelle A. Danis & Anthony Pennington-Cross, 2005. "A dynamic look at subprime loan performance," Working Papers 2005-029, Federal Reserve Bank of St. Louis.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. William H. Rogers, 2010. "Declining foreclosure neighborhood effects over time," Housing Policy Debate, Taylor & Francis Journals, vol. 20(4), pages 687-706, September.
    2. Lynn Fisher & Lauren Lambie-Hanson & Paul S. Willen, 2010. "A profile of the mortgage crisis in a low-and-moderate-income community," Public Policy Discussion Paper 10-6, Federal Reserve Bank of Boston.
    3. Prabal Chakrabarti, 2009. "Massachusetts’ efforts to address foreclosed properties," Community Development Innovation Review, Federal Reserve Bank of San Francisco, issue 1, pages 65-72.
    4. Kathe Newman, 2010. "Go Public!," Journal of the American Planning Association, Taylor & Francis Journals, vol. 76(2), pages 160-171, April.
    5. Ingrid Gould Ellen & Josiah Madar & Mary Weselcouch, 2015. "The Foreclosure Crisis and Community Development: Exploring REO Dynamics in Hard-Hit Neighborhoods," Housing Studies, Taylor & Francis Journals, vol. 30(4), pages 535-559, July.
    6. Christopher Niedt & Isaac William Martin, 2013. "Who Are the Foreclosed? A Statistical Portrait of America in Crisis," Housing Policy Debate, Taylor & Francis Journals, vol. 23(1), pages 159-176, January.
    7. Daniel Immergluck, 2009. "Intrametropolitan patterns of foreclosed homes: ZIP-code-level distributions of real-estate-owned (REO) properties during the U.S. mortgage crisis," FRB Atlanta Community and Economic Development Discussion Paper 2009-01, Federal Reserve Bank of Atlanta.
    8. Jeremy R. Groves & William H. Rogers, 2011. "Effectiveness of RCA Institutions to Limit Local Externalities: Using Foreclosure Data to Test Covenant Effectiveness," Land Economics, University of Wisconsin Press, vol. 87(4), pages 559-581.
    9. Ryan M. Goodstein, 2014. "Refinancing Trends among Lower Income and Minority Homeowners during the Housing Boom and Bust," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 42(3), pages 690-723, September.
    10. Dan Immergluck, 2011. "The Local Wreckage of Global Capital: The Subprime Crisis, Federal Policy and High‐Foreclosure Neighborhoods in the US," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 35(1), pages 130-146, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kristopher Gerardi & Eric Rosenblatt & Paul S. Willen & Vincent W. Yao, 2012. "Foreclosure externalities: some new evidence," Public Policy Discussion Paper 12-5, Federal Reserve Bank of Boston.
    2. Ying Huang & Ronald W. Spahr & Mark A. Sunderman, 2020. "The Impact of Default and Foreclosure on Housing Values: Rings Vs. Neighborhoods Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 60(3), pages 338-374, April.
    3. Jeffrey P. Cohen & Cletus C. Coughlin & Vincent W. Yao, 2016. "Sales of Distressed Residential Property: What Have We Learned from Recent Research?," Review, Federal Reserve Bank of St. Louis, vol. 98(3), pages 159-188.
    4. Remco Mocking & Bastiaan Overvest, 2015. "Estimating the Impact of Forced Sales on House Prices," CPB Discussion Paper 304.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Biswas, Arnab & Cunningham, Chris & Gerardi, Kristopher & Sexton, Daniel, 2021. "Foreclosure externalities and Vacant Property Registration Ordinances," Journal of Urban Economics, Elsevier, vol. 123(C).
    6. Chan, Sewin & Gedal, Michael & Been, Vicki & Haughwout, Andrew, 2013. "The role of neighborhood characteristics in mortgage default risk: Evidence from New York City," Journal of Housing Economics, Elsevier, vol. 22(2), pages 100-118.
    7. Chan, Sewin & Haughwout, Andrew & Tracy, Joseph, 2015. "How Mortgage Finance Affects the Urban Landscape," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 987-1045, Elsevier.
    8. Chomsisengphet, Souphala & Kiefer, Hua & Liu, Xiaodong, 2018. "Spillover effects in home mortgage defaults: Identifying the power neighbor," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 68-82.
    9. Deborah A. Carroll & Christopher B. Goodman, 2022. "Neighborhood Institutions and Residential Home Sales: Evaluating the Impact of Property Tax Exemptions," The Journal of Real Estate Finance and Economics, Springer, vol. 64(2), pages 247-273, February.
    10. Khandani, Amir E. & Lo, Andrew W. & Merton, Robert C., 2013. "Systemic risk and the refinancing ratchet effect," Journal of Financial Economics, Elsevier, vol. 108(1), pages 29-45.
    11. Kristopher Gerardi & Kyle F. Herkenhoff & Lee E. Ohanian & Paul S. Willen, 2018. "Can’t Pay or Won’t Pay? Unemployment, Negative Equity, and Strategic Default," The Review of Financial Studies, Society for Financial Studies, vol. 31(3), pages 1098-1131.
    12. W. Scott Frame, 2010. "Estimating the effect of mortgage foreclosures on nearby property values: a critical review of the literature," Economic Review, Federal Reserve Bank of Atlanta, vol. 95(3).
    13. Anthony Pennington-Cross, 2010. "The Duration of Foreclosures in the Subprime Mortgage Market: A Competing Risks Model with Mixing," The Journal of Real Estate Finance and Economics, Springer, vol. 40(2), pages 109-129, February.
    14. Simlai, Prodosh, 2019. "Subprime credit, idiosyncratic risk, and foreclosures," The Quarterly Review of Economics and Finance, Elsevier, vol. 74(C), pages 175-189.
    15. Calabrese, Raffaella & Crook, Jonathan, 2020. "Spatial contagion in mortgage defaults: A spatial dynamic survival model with time and space varying coefficients," European Journal of Operational Research, Elsevier, vol. 287(2), pages 749-761.
    16. Gerardi, Kristopher & Rosenblatt, Eric & Willen, Paul S. & Yao, Vincent, 2015. "Foreclosure externalities: New evidence," Journal of Urban Economics, Elsevier, vol. 87(C), pages 42-56.
    17. Chen, Denghui & Kiefer, Hua & Liu, Xiaodong, 2022. "Estimation of discrete choice network models with missing outcome data," Regional Science and Urban Economics, Elsevier, vol. 97(C).
    18. W. Scott Frame & Lawrence J. White, 2009. "Technological change, financial innovation, and diffusion in banking," FRB Atlanta Working Paper 2009-10, Federal Reserve Bank of Atlanta.
    19. Agarwal, Sumit & Zhang, Yunqi, 2018. "Effects of government bailouts on mortgage modification," Journal of Banking & Finance, Elsevier, vol. 93(C), pages 54-70.
    20. Theresa Kuchler & Johannes Stroebel, 2009. "Foreclosure and Bankruptcy--Policy Conclusions from the Current Crisis," Discussion Papers 08-037, Stanford Institute for Economic Policy Research.

    More about this item

    Keywords

    Foreclosure;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedfcr:y:2009:p:7-42:n:v.5no.1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Federal Reserve Bank of San Francisco Research Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbsfus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.