Strategic Foreclosure as an Indicator of Eroding Institutional Structures
AbstractMany houses purchased just before the housing bubble burst have a market value lower than the amount of the mortgages on them; they are said to be underwater. Among homeowners in such a position, a number have adequate financial wherewithal to make the payments but choose to voluntarily default on the loan. Evidence suggests that a growing number of homeowners are taking this course, known as strategic, or voluntary, foreclosures. Once a stigma, voluntary foreclosure seems to be gaining in social acceptability. The phenomenon appears to be reflective of the broad trend that Max Weber termed the increasing rationalization of society.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Journal of Economic Issues.
Volume (Year): 46 (2012)
Issue (Month): 2 (June)
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Web page: http://www.mesharpe.com/mall/results1.asp?acr=jei
foreclosure; housing crisis; rationalization;
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