The Value of Equitable Redemption in Commercial Mortgage Contracting

Fisher, Lynn M.; Yavaş, Abdullah

doi:10.1007/s11146-007-9064-4

Cited by 6 publications

(4 citation statements)

References 12 publications

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“…Traditionally, the role of housing in the macroeconomy was limited to exploring its role over the business cycle through various channels such as residential investment (i.e., Davis and Heathcote, 2005;Leamer, 2007;Fisher and Yavas, 2007;Rupert and Wasmer, 2014;and Boldrin et al 2013), collateral constraints (i.e., Iacoviello, 2005;Iacoviello and Neri, 2010;and Liu, Wang, and Zha, 2013), and nominal mortgage contracts (i.e., Garriga, Kydland, andSustek, 2017 and. 1 These papers measure the importance of housing to high-frequency movements of the economy but were not designed to address large and broad swings in house prices across markets and their interaction with the macroeconomy.…”

Section: Literature: Housing the Macroeconomy And The Great Recmentioning

confidence: 99%

The Geography of Housing Market Liquidity During the Great Recession

Famiglietti¹,

Garriga

Hedlund

2020

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The historic deterioration of housing markets during the Great Recession was characterized by plummeting home values and skyrocketing foreclosure rates. Although almost no place in the Unites States escaped unscathed, significant heterogeneity emerged across both time and space with regard to the housing market collapse. An important aspect missing in many theoretical and empirical studies of this episode is the role of liquidity in local housing markets as manifested in homes taking longer to sell. Examining the dynamics of ZIP-code-level data reveals that the severity, timing, and length of the Great Recession varied across regions and is linked to housing liquidity. Throughout this article, our main measure of housing liquidity is time on the market (TOM), the Using detailed micro data at the ZIP code level, this article explores the regional variation in housing market performance to account for the severity of the Great Recession. The granularity of the data, relative to a more traditional analysis at the county level, is useful for evaluating the performance of the housing market because credit and local macroeconomic variables are tied to housing valuations. The deterioration of the ability to transact (buy and sell) housing units, often referred to as housing liquidity, is an important link that connects housing outcomes with real and credit variables. The data indicate that the timing, severity, and duration of the recession varied across regions and was closely connected with the behavior of the housing market. The deterioration in housing liquidity was uniform across all house price tiers (i.e., bottom, middle, and upper end). Furthermore, there was correlation across areas between the magnitude of the declines in housing liquidity and the severity of the deterioration in house prices and macroeconomic conditions.

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Section: Literature: Housing the Macroeconomy And The Great Recmentioning

confidence: 99%

The Geography of Housing Market Liquidity During the Great Recession

Famiglietti¹,

Garriga

Hedlund

2020

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Section: Literature: Housing the Macroeconomy And The Great Recessionmentioning

confidence: 99%

The College Wealth Divide: Education and Inequality in America, 1956-2016

2019

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“…In spite of the enduring presence of mortgage redemption laws, economists have devoted relatively little attention to explaining their function. Exceptions include Alston (1984), who studied the causes and effects of mortgage foreclosure moratoria (temporary relief from foreclosure) enacted during the Great Depression; Jaffe and Sharp (1996), who discussed foreclosure moratoria as an efficient legislative response to unforeseen economic downturns, given the incompleteness of mortgage contracts; Hynes, Malani and Posner (2003), who examined the related issue of laws exempting property from bankruptcy proceedings, and Fisher (2006) and Fisher and Yavas (2007), who examine equitable redemption 2…”

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confidence: 99%

An Economic Theory of Mortgage Redemption Laws

Baker¹,

Miceli²,

Sirmans³

2008

Real Estate Economics

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Redemption laws give mortgagors the right to redeem their property following default for a statutorily set period of time. This article develops a theory that explains these laws as a means of protecting landowners against the loss of nontransferable values associated with their land. A longer redemption period reduces the risk that this value will be lost but also increases the likelihood of default. The optimal redemption period balances these effects. Empirical analysis of cross-state data from the early twentieth century suggests that these factors, in combination with political considerations, explain the existence and length of redemption laws. Copyright 2008 American Real Estate and Urban Economics Association

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The Value of Equitable Redemption in Commercial Mortgage Contracting

Abstract: Equitable redemption, Commercial mortgage contracting, Clogging,

Cited by 6 publications

References 12 publications

The Geography of Housing Market Liquidity During the Great Recession

The Geography of Housing Market Liquidity During the Great Recession

The College Wealth Divide: Education and Inequality in America, 1956-2016

An Economic Theory of Mortgage Redemption Laws

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