Brief Review of the Literature
A review of the literature reveals a common theme among experts in this field of study. The recurring themes present is the current literature include the financial crisis of 2008 and foreclosure impacts. Foreclosure impacts include the effects of crime, housing sales, property valuation, property abandonment, neighborhood destabilization, and shifts in tax revenue. The sources of the literature reviewed were scholarly journals, peer-reviewed journals and governmental websites. The foreclosure impacts will be presented as subtopics within the body of this paper.
Financial Crisis of 2008
The financial crisis of 2008 is often compared to the Depression of the 1930’s. Connors and Gwartney (2009) and Spiegel (2011) provide detailed analyses of the financial crisis of 2008 by discussing similarities related to the Great Depression. Research further suggests that some governmental policies in place prior to the collapse may have unintentionally contributed to the subprime mortgage crisis. An example used to illustrate this point is the 1977 Community Reinvestment Act, which encouraged banks to make loans in low-moderate-income areas (Spiegel, 2011). To comply with the regulation, many banks lowered their credit standards, which led to higher default rates in the targeted communities. Most of the research corroborates the belief that a decline in lending standards significantly contributed to the financial crisis of 2008 (Been, Chan, Gould & Madar, 2011; Connors & Gwartney, 2009; Foote, Gerardi, & Willen, 2012; Frame, 2010; Immergluck & Smith, 2010; Kaplan & Sommers, 2009; Spiegel, 2011).
The shift from conventional lending standards to flexible standards seriously impacted the mortgage markets...
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Whelan, K. (2013, Summer). Arrests dramatize Wall Street impunity and continuing foreclosure crisis. Social Policy, 43(2), 35-39. Retrieved from http://eds.b.ebscohost.com.proxy1.ncu.edu/eds/pdfviewer/pdfviewer?sid=acc280c5-5b9d-4d2b-aca6-a42c4088e034%40sessionmgr114&vid=6&hid=102
White, M. J. (1986). Property taxes and urban housing abandonment. Journal of Urban Economics, 20, 312-330. doi: 10.1016/0094-1190(86)90022-7
Wolff, K. T., Cochran, J. C., & Baumer, E. P. (2014, February). Reevaluating foreclosure effects on crime during the “Great Recession”. Journal of Contemporary Criminal Justice, 30(1), 41-69. doi: 10.1177/1043986213509025
Zalewski, D. A. (2012, June). Collective action failures and lenders of last resort: Lessons from the U.S. foreclosure crisis. Journal of Economic Issues (M.E. Sharpe Inc), 46(2), 333-342. doi: 10.2753/JEI0021-3624460208