Publications

  • Do Foreclosures Cause Crime?

    The mortgage foreclosure crisis has generated increasing concerns about the effects of foreclosed properties on their surrounding neighborhoods, and on criminal activity in particular. Using a unique dataset of point-specific longitudinal crime and foreclosure data from New York City, this paper explores whether foreclosed properties affect criminal activity on the surrounding blockface – an individual street segment including properties on both sides of the street. The researchers report that foreclosures on a blockface lead to additional violent crimes and public order crimes, and these effects are largest when foreclosure activity is measured by the number of bank-owned properties on a blockface.

  • Pathways After Default: What Happens to Distressed Mortgage Borrowers and Their Homes?

    We use a detailed dataset of seriously delinquent mortgages to examine the dynamic process of mortgage default – from initial delinquency and default to final resolution of the loan and disposition of the property. We estimate a two-stage competing risk hazard model to assess the factors associated with whether a borrower behind on mortgage payments receives a legal notice of foreclosure, and with what ultimately happens to the borrower and property. In particular, we focus on a borrower’s ability to avoid a foreclosure auction by getting a modification, by refinancing the loan, or by selling the property. We find that the outcomes of the foreclosure process are significantly related to: the terms of the loan; the borrower’s credit history; current loan-to-value and the presence of a junior lien; the borrower’s post-default payment behavior; the borrower’s participation in foreclosure counseling; neighborhood characteristics such as foreclosure rates, recent house price depreciation and median income; and the borrower’s race and ethnicity.