The Effects of Foreclosure Counseling for Distressed Homeowners. (25th October 2012)

• Record Type: Journal Article
• Authors: Collins, J. Michael; Schmeiser, Maximilian D.
• Is Part Of: Journal of policy analysis and management. Volume 32:issue 1(2013)
• Page Start: 83
• Page End: 106
• Publication Date: 2012-10-25
• Subjects: Policy sciences -- Periodicals; Political planning -- United States -- Periodicals; United States -- Social policy -- Periodicals; 353
• DOI: 10.1002/pam.21670
• Languages: English
• ISSNs: 0276-8739

Abstract

<abstract abstract-type="main"> <title>Abstract</title> <p>In the face of the housing market downturn of the late 2000s, policymakers promoted third‐party mortgage default counseling as a way to help people at risk of losing their homes to avoid foreclosure. Using a unique data set of monthly loan payments remitted to investors combined with administrative data from a national counseling agency, this study estimates the effects of default counseling on the probability that troubled mortgage borrowers will lose their homes to foreclosure. Borrowers are actually more likely to miss loan payments after receiving counseling, but the probability of losing a home to foreclosure drops after counseling, suggesting that counseling policies may be beneficial during housing crises.</p> </abstract>