The Value of Foreclosed Property

By A. Pennington-Cross. 2004

184 citations recorded by the source corpus.

This paper examines the expected price appreciation of distressed property and compares it to the prevailing metropolitan area appreciation rate. The results show that the simple fact that the property is foreclosed indicates that it will be sold at a substantial discount (appreciate less than expected). The magnitude of the discount is sensitive to loan characteristics, legal restrictions, housing market conditions, and the bargaining position of the selling institution.

Subfields: Accounting, Economics and Econometrics, Management, Monitoring, Policy and Law

View Paper: https://www.semanticscholar.org/paper/fa8ebc7518e283d39b48ef63ab723b38e92f2675

Citations in the corpus

• Estimating the House Foreclosure Discount Corrected for Spatial Price Interdependence and Endogeneity of Marketing Time (2009, unknown): “At least two articles, Carroll, Clauretie and Neill (1997) and Pennington-Cross (2006), question whether foreclosure discounts are due to the pure stigma effect.”
• Macroeconomic Effects of Bankruptcy and Foreclosure Policies (2016, unknown): “The average loss was estimated by Pennington-Cross (2006) to be 22%.”
• The Housing Boom and Bust: Model Meets Evidence (2017, unknown): “In the event of a mortgage default, the depreciation rate rises to 25%, consistent with the loss of value for foreclosed properties estimated in Pennington-Cross (2009). The transaction cost for selling a house κh equals 7% of the value of the house.”
• Unemployment, Negative Equity, and Strategic Default (2013, unknown): “by Pennington-Cross [2006]).”