Fed Study: Add Bankruptcy Reform to List of Foreclosure Triggers

Was an increase in foreclosures an unintended consequence of the passage of bankruptcy reform?  Following the implementation of bankruptcy abuse reform (BAR) in October 2005, foreclosures on subprime mortgages surged nationwide.  Three researchers have now published their findings from a study asking whether the surge was merely coincidental or whether reform played any role.

The paper, Subprime Foreclosures and the 2005 Bankruptcy Reform, published by the Federal Reserve Bank of New York and written by Donald P. Morgan, assistant vice president of the bank and graduate students Benjamin Iverson of Harvard University of Matthew Botsch, of the University of California at Berkley Indicates that the reforms may well have shifted the burden of bankruptcy from unsecured creditors to subprime lenders.

...(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Source: http://www.mortgagenewsdaily.com/02092011_foreclosures_bankruptcy.asp

Mortgage Crisis Real Estate Agents Housing Market Mortgage