Slowing Down Foreclosures Can Mitigate Recessions

Friday, Jan 6, 2017
by vrosenth

Foreclosure laws vary by state and can be divided between those that require lenders to sue borrowers in court before they can sell the foreclosed property—known as judicial foreclosure—and those that don’t. Princeton’s Atif R. Mian, Chicago Booth’s Amir Sufi, and University of British Columbia’s Francesco Trebbi find that judicial foreclosure laws made a substantial difference in the rate of foreclosure in those states that had them during the 2007–10 financial crisis, and they help explain regional differentiation in the severity of the crisis.  Read more in this article published in the Chicago Booth Review