Collateral damage: The impact of foreclosures on new home mortgage lending in the 1930s

Price Fishback; Sebastian Fleitas; Jonathan Rose; Ken Snowden

doi:10.1017/S0022050720000352

Collateral damage: The impact of foreclosures on new home mortgage lending in the 1930s

Price Fishback, Sebastian Fleitas, Jonathan Rose, Ken Snowden

Economics

Research output: Contribution to journal › Review article › peer-review

2 Scopus citations

Abstract

The Great Depression of the 1930s involved a severe disruption in the supply of home mortgage credit. This paper empirically identifies a mechanism lying behind this credit crunch: the impairment of lenders' balance sheets by illiquid foreclosed real estate. With data on hundreds of building and loans (B&Ls), the leading mortgage lenders in this period, we find that the overhang of foreclosed real estate explains about 30 percent of the drop in new lending between 1930 and 1935.

Original language	English (US)
Pages (from-to)	853-885
Number of pages	33
Journal	Journal of Economic History
Volume	80
Issue number	3
DOIs	https://doi.org/10.1017/S0022050720000352
State	Published - 2020

ASJC Scopus subject areas

History
Economics and Econometrics
Economics, Econometrics and Finance (miscellaneous)

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10.1017/S0022050720000352

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abstract = "The Great Depression of the 1930s involved a severe disruption in the supply of home mortgage credit. This paper empirically identifies a mechanism lying behind this credit crunch: the impairment of lenders' balance sheets by illiquid foreclosed real estate. With data on hundreds of building and loans (B\&Ls), the leading mortgage lenders in this period, we find that the overhang of foreclosed real estate explains about 30 percent of the drop in new lending between 1930 and 1935.",

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AB - The Great Depression of the 1930s involved a severe disruption in the supply of home mortgage credit. This paper empirically identifies a mechanism lying behind this credit crunch: the impairment of lenders' balance sheets by illiquid foreclosed real estate. With data on hundreds of building and loans (B&Ls), the leading mortgage lenders in this period, we find that the overhang of foreclosed real estate explains about 30 percent of the drop in new lending between 1930 and 1935.

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Collateral damage: The impact of foreclosures on new home mortgage lending in the 1930s

Abstract

ASJC Scopus subject areas

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