Collateral Damage: The Impact of Foreclosures on New Home Mortgage Lending in the 1930s

42 Pages Posted: 12 Nov 2018

See all articles by Price V. Fishback

Price V. Fishback

University of Arizona; National Bureau of Economic Research (NBER)

Sebastián Fleitas

Universidad de la Republica - Instituto de Economía

Jonathan Rose

Federal Reserve Bank of Chicago

Kenneth Snowden

University of North Carolina (UNC) at Greensboro - Bryan School of Business & Economics; National Bureau of Economic Research (NBER)

Date Written: November 2018

Abstract

Foreclosures led to severe disruptions in home mortgage lending during the recent Great Recession and the Great Depression of the 1930s. It is difficult to measure these impacts in the modern market where origination, funding and servicing are separated within complex lending structures, but during the 1930s local building & loans (B&Ls) combined all three functions. We measure the impact of foreclosures on new mortgage lending using a panel of all B&Ls in 4 states. The foreclosure overhang explains about 30 percent of the drop in new mortgage lending by B&Ls as the housing crisis intensified between 1930 and 1935.

Suggested Citation

Fishback, Price V. and Fleitas, Sebastián and Rose, Jonathan and Snowden, Kenneth, Collateral Damage: The Impact of Foreclosures on New Home Mortgage Lending in the 1930s (November 2018). NBER Working Paper No. w25246, Available at SSRN: https://ssrn.com/abstract=3282946

Price V. Fishback (Contact Author)

University of Arizona ( email )

Tucson, AZ 85721-0108
United States
520-621-4421 (Phone)
520-621-8450 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sebastián Fleitas

Universidad de la Republica - Instituto de Economía ( email )

Uruguay

Jonathan Rose

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Kenneth Snowden

University of North Carolina (UNC) at Greensboro - Bryan School of Business & Economics ( email )

401 Bryan Building
Greensboro, NC 27402-6179
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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