Foreclosures, House Prices, and the Real Economy
Atif Mian, Amir Sufi, Francesco Trebbi
Abstract
A central idea in macroeconomic theory is that negative price effects from the leverage-induced forced sale of durable goods can amplify negative shocks and reduce economic activity. We examine this idea by estimating the effect of U.S. foreclosures in 2008 and 2009 on house prices, residential investment, and durable consumption. We show that states that require judicial process for a foreclosure sale have significantly lower rates of foreclosures relative to states that have no such requirement. Using state laws requiring a judicial foreclosure as an instrument for actual foreclosures, as well as a regression discontinuity design around state borders with differing foreclosure laws, we show that foreclosures have a large negative impact on house prices. Foreclosures also lead to a significant decline in residential investment and durable consumption. The magnitudes of the effects are large, suggesting that foreclosures have been an important factor in weak house price, residential investment, and durable consumption patterns during and after the Great Recession of 2007 to 2009.
Full report below…
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4closureFraud.org
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Foreclosures, House Prices, and the Real Economy
Who is it that caused the downturn in our economic system? Was that your typical bankers of a mafia type Government Bureacracy like Freddy Mac or GennieMae” I don’t think it was my fault.
Find out who their owners and investors are and then find out who owns them and you will find all roads lead to Rome and their tentacles reach back into America. Bloomberg reported that the IMF is the biggest bondholder in Fannie Mae…..but they are a GSE…..?? hmmmm……then, you have Barney Frank whose boyfriend got a big job at Fannie Mae….then you have the Obama Adm…who was one of Obamas biggest campaign contributors? …Goldman Sachs..who is…the biggest SMOM/VATICAN/JESUIT banking proxy in the world…..the banks and George Soros funded the rest of the campaign….yes, Obama, and all of their minions and cohorts were a shoe in….then you have the ex-chief of staff, Rahm Emmanuel who also has a dual Israeli citizenship like Michael Chertoff, used to work at Freddie Mac….and now he is the mayor of Chicago….and according to many attorneys that I have recently spoken with Chicago has become the biggest fraudclosure tyranny in America..which I have witnesse first hand…….The devils are all here, disguised as Americans, they are all wolves in sheeps clothing….in both parties….all you have to do is look into who fills these politicians coffers and what these politicians investments are, what secret club they belong to and you will see all of the dots begin to connect…this is a vast criminal conspiracy……this was the biggest financial coup de tat in the History of the world….and the ruling elite investors could have never pulled it off without inside help….just like 9/11, this was an INSIDE JOB….and the scope of this is almost unimaginable….
Viacom and Comcast are both owned by the same Elitist ~~ they now control all networks [which the Fed Res has for many many years] and now most of the cable works as well……..hummmm
What ever happened to the laws of monopolies and anti-trust violations??? We use to hear about lawsuits and violations all of the time on the news? Oh yeah, now the news is totally controlled……..
I remember when one of the CBS executives made the statement: “we give the people the news of what they need not know, but what we want them to have” ~~~
Jim, we are going to switch to the dish….Has anyone heard that they spy on us through our cable boxes..? There is a you tube video where a guy takes apart a cable box and sure enough found a camera hidden inside….That is totally Orwellian and creepy considering those boxes are required to be on all tvs in your home now, even in our bedrooms and our kids bedrooms….
Vent…I have been using Direct T.V. for 13 years….no problems…period!
I will look into that one Rob…
And of course Washington attempts to ‘fix’ everything but the housing market, which continues to decline. The consensus of opinion now is that they just need to dump the foreclosures on the market as REOs and let the bottom settle. This is a short-sighted and disasterous assumption that will trigger a double dip or even depression. I doubt that many realize that the shadow inventory of foreclosures or potential foreclosures being held off the market is as large as it is. When they do get out from under the threat of investors, you will see banks dump REOs on the market and foreclose on defaults. The result will be massive damage to the housing market in which it will not recover for years. The worst of that is that REOs are not selling well now unless heavily discounted. Discounting REOs to meet market demand, often foreign demand, will complete the underwater sinking.
This is hind sight previewing foresight.
You will hear the comment, “We didn’t realize.” It won’t matter that those in the housing industry warned of the potential problem. There will be little that can be done at that point. The big banks, sitting on their massive reserves will live to play another day once they are out from under the threat of investor litigation.
Foreclosures are nothing more than theft by the ruling elite of the homes of the American people that they do not own and never did….The American people now are becoming more and more aware of the facts, that these criminals never lent us any money and in reality the U.S. TAXPAYER has footed the bill for everything in this country including all of their illegal taxpayer funded Ponzi Schemes with our tax dollars…..They thought they had brainwashed the American people enought to get away with this…I have spoken with alot of people over the last several months that are fighting this illegal foreclosure tyranny…and the overall general concensus is the same…..they will not comply with this fascist agenda…..if their house is stolen from them….they will either gut it, burn it down or bulldoze it….and the state Capitals as well with all of the traitors and treasonist politicians along with it..
and we are all armed to the teeth…
I would like Comcast cable to know that neither I nor any other of their subscribers are even the slightest bit fooled by the fact that they have completely blacked out RT NEWS channel in Chicago…who have been telling the truth about Wall Streets crimes against humanity…….We all are going to switch to the satellite dish….and dump you….
Yet another reasonable call to end illegal land seizures by Wall Street and it’s proxy, the US Treasury Department.
Illegitimate authority doesn’t just “walk away”, fight back people!