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The accumulation of lender-owned homes during the US mortgage crisis: examining metropolitan REO inventories

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  • Dan Immergluck

Abstract

A key concern among policymakers and community developers in recent years has been the extent to which lender-owned homes, often called real estate owned or “REO” properties, accumulate in different local housing markets during the mortgage crisis. This paper describes the accumulation of REO properties in 356 metropolitan statistical areas (MSAs) from August 2006 to August 2008. It examines differences in both changes and static levels of REO activity across MSAs and compares changes in REO levels to changes in home values over the same period. Special attention is paid to 12 large MSAs with substantial levels of REO as of August 2008. A model of REO volume at the metropolitan level is estimated that includes differences in state foreclosure legal processes and timing among the independent variables. Finally, cluster analysis is used to identify a simple typology of MSAs based on REO levels and home price changes.

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  • Dan Immergluck, 2010. "The accumulation of lender-owned homes during the US mortgage crisis: examining metropolitan REO inventories," Housing Policy Debate, Taylor & Francis Journals, vol. 20(4), pages 619-645, September.
    • Handle: RePEc:taf:houspd:v:20:y:2010:i:4:p:619-645
    DOI: 10.1080/10511482.2010.505872
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    References listed on IDEAS

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    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. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, March.
    3. Daniel Immergluck, 2008. "Community response to the foreclosure crisis: thoughts on local interventions," FRB Atlanta Community and Economic Development Discussion Paper 2008-01, Federal Reserve Bank of Atlanta.
    4. Alan Mallach, 2008. "How to spend $3.92 billion: stabilizing neighborhoods by addressing foreclosed and abandoned properties," Community Affairs Discussion Paper 08-01, Federal Reserve Bank of Philadelphia.
    5. 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.
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    Cited by:

    1. Kyungsoon Wang, 2019. "Housing market resilience: Neighbourhood and metropolitan factors explaining resilience before and after the US housing crisis," Urban Studies, Urban Studies Journal Limited, vol. 56(13), pages 2688-2708, October.
    2. Brett Christophers & Christopher Niedt, 2016. "Resisting devaluation: Foreclosure, eminent domain law, and the geographical political economy of risk," Environment and Planning A, , vol. 48(3), pages 485-503, March.
    3. Matthew Hall & Kyle Crowder & Amy Spring, 2015. "Variations in Housing Foreclosures by Race and Place, 2005–2012," The ANNALS of the American Academy of Political and Social Science, , vol. 660(1), pages 217-237, July.

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