The effects of a foreclosure moratorium on loan repayment behaviors


J. Michael Collins, Carly Urban


Regional Science and Urban Economics


During the 2008 housing crisis, lenders were accused of making mistakes when repossessing homes, spurring some policymakers to call for a moratorium on foreclosure filings. Using a New Jersey court-ordered stay on foreclosure-related filings that applied to six high-profile lenders and a difference-in-difference-in-differences strategy, this paper shows that loans impacted by the moratorium are no more likely to be observed as in default as comparable loans not subject to the court order. Borrowers, and lenders, appear to respond in ways that did not result in the strongly negative effects initially predicted by critics at the time, and this policy may have accomplished the intended consumer protection goals.



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