The Foreclosure Crisis in 2008: Predatory Lending or Household Overreaching?

Emmons, William R.; Fogel, Kathy; Lee, Wayne Y.; Liping Ma; Rorie, Deena; Yeager, Timothy J.
July 2011
Regional Economist;Jul2011, Vol. 19 Issue 3, p12
Trade Publication
The article provides an analysis of the cause of the housing foreclosure in 2008. To assess whether the main cause is predatory lending or household overreaching, the characteristics of the households are studied. The research shows that many of the households affected are young family that are well-educated. The overreaching hypothesis appears to be supported but the main cause for the crisis points to the housing price bubble. The view of economist Hyman Minsky on pricing bubble is discussed.


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