How Are They Now? A Checkup on Homeowners Who Experienced Foreclosure

Andrew Haughwout, Donggyu Lee, Daniel Mangrum, Belicia Rodriguez, Joelle Scally and Wilbert van der Klaauw

No 20240508, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The end of the Great Recession marked the beginning of the longest economic expansion in U.S. history. The Great Recession, with its dramatic housing bust, led to a wave of home foreclosures as overleveraged borrowers found themselves unable to meet their payment obligations. In early 2009, the New York Fed’s Research Group launched the Consumer Credit Panel (CCP), a foundational data set of the Center for Microeconomic Data, to monitor the financial health of Americans as the economy recovered. The CCP, which is based on anonymized credit report data from Equifax, gives us an opportunity to track individuals during the period leading to the foreclosure, observe when a flag is added to their credit report and then—years later—removed. Here, we examine the longer-term impact of a foreclosure on borrowers’ credit scores and borrowing experiences: do they return to borrowing, or shy away from credit use and homeownership after their earlier bad experience?

Keywords: Consumer Credit Panel (CCP); household finance; foreclosure; housing (search for similar items in EconPapers)
JEL-codes: G5 (search for similar items in EconPapers)
Date: 2024-05-08
New Economics Papers: this item is included in nep-ban and nep-ure
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