| Federal Reserve Bank of Atlanta Working Paper |
| Sunday, 07 June 2009 | |
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A recently released Paper by Federal Reserve Bank of Atlanta takes a skeptical look at a leading argument about what is causing the foreclosure crisis and what should be done to stop it. The model and analysis that was used illustrate that "unaffordable loans" , are unlikely to be the main reason that borrowers decide to default. "In addition, this paper provides theoretical results and empirical evidence supporting the hypothesis that the efficiency of foreclosure for investors is a more plausible explanation for the low number of modifications to date than contract frictions related to rather than modifying loans to make them more affordable on a long-term basis. An important implication of our analysis is that policies designed to reduce foreclosures should focus on ameliorating the immediate effects of job loss and other adverse life events rather than modifying loans to make them more affordable on a long-term basis." To view the Paper in its entirety, please click here. About SafeguardSafeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico. |
