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Compensation and Socio-Economic Status of Borrowers in Foreclosure : Evidence from Swedish Micro-data

Lundholm, M. LU (2020) In Journal of Consumer Policy
Abstract

Proper compensation during foreclosure is essential to any effort to protect borrowers as consumers. However, the effectiveness of consumer protection and other safety nets during foreclosure has been debated within academia. This study contributes to this debate by exploring socio-economic group differences related to the compensatory potential of foreclosure proceedings. It employs micro-level data on foreclosure auctions in Sweden from 2000 to 2014. The results indicate that there is a correlation between high socio-economic status and a greater potential for compensation and that this is likely not explained by appraiser bias. This article discusses these empirical findings in terms of the need for strict consumer protection... (More)

Proper compensation during foreclosure is essential to any effort to protect borrowers as consumers. However, the effectiveness of consumer protection and other safety nets during foreclosure has been debated within academia. This study contributes to this debate by exploring socio-economic group differences related to the compensatory potential of foreclosure proceedings. It employs micro-level data on foreclosure auctions in Sweden from 2000 to 2014. The results indicate that there is a correlation between high socio-economic status and a greater potential for compensation and that this is likely not explained by appraiser bias. This article discusses these empirical findings in terms of the need for strict consumer protection regulation and other safety nets, such as alternative mortgage products or debt relief, to ensure that there is a potential for compensation for all borrowers in foreclosure, regardless of socio-economic status.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
epub
subject
keywords
Compensation, Consumer protection, Foreclosure, Mortgage, Socio-economic status
in
Journal of Consumer Policy
publisher
Luchterhand
external identifiers
  • scopus:85098249109
ISSN
0168-7034
DOI
10.1007/s10603-020-09474-w
language
English
LU publication?
yes
id
55c9f093-96a1-4893-b9c4-9256d4bd9489
date added to LUP
2021-01-11 07:45:50
date last changed
2021-01-11 07:45:50
@article{55c9f093-96a1-4893-b9c4-9256d4bd9489,
  abstract     = {<p>Proper compensation during foreclosure is essential to any effort to protect borrowers as consumers. However, the effectiveness of consumer protection and other safety nets during foreclosure has been debated within academia. This study contributes to this debate by exploring socio-economic group differences related to the compensatory potential of foreclosure proceedings. It employs micro-level data on foreclosure auctions in Sweden from 2000 to 2014. The results indicate that there is a correlation between high socio-economic status and a greater potential for compensation and that this is likely not explained by appraiser bias. This article discusses these empirical findings in terms of the need for strict consumer protection regulation and other safety nets, such as alternative mortgage products or debt relief, to ensure that there is a potential for compensation for all borrowers in foreclosure, regardless of socio-economic status.</p>},
  author       = {Lundholm, M.},
  issn         = {0168-7034},
  language     = {eng},
  month        = {12},
  publisher    = {Luchterhand},
  series       = {Journal of Consumer Policy},
  title        = {Compensation and Socio-Economic Status of Borrowers in Foreclosure : Evidence from Swedish Micro-data},
  url          = {http://dx.doi.org/10.1007/s10603-020-09474-w},
  doi          = {10.1007/s10603-020-09474-w},
  year         = {2020},
}