Studying home foreclosures in India

Abstract

Foreclosures are an important mechanism by which mortgage lenders take control of the property after the borrowers have defaulted on their housing loans. Without this credible threat, lenders have little bargaining power to get their money back. In large countries such as the US, foreclosures are quite common, especially following the burst of housing price bubbles, and governments have intervened, both directly and indirectly, to help low income borrowers avoid foreclosures through debt restructuring and loan write-offs. Foreclosed properties are typically auctioned off at below market prices and can have a significant impact on valuation of nearby properties. Data on foreclosures are also used as indicators for the strength of the housing market.