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Well Worth SavingHow the New Deal Safeguarded Home Ownership$
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Price V. Fishback, Jonathan Rose, and Kenneth Snowden

Print publication date: 2013

Print ISBN-13: 9780226082448

Published to Chicago Scholarship Online: May 2014

DOI: 10.7208/chicago/9780226082585.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 02 August 2021

The Mortgage Crisis

The Mortgage Crisis

(p.20) Chapter 3 The Mortgage Crisis
Well Worth Saving

Price Fishback

Jonathan Rose

Kenneth Snowden

University of Chicago Press

This chapter describes the foreclosure crisis of the 1930s. Borrower defaults were rooted in the double trigger of reduced incomes and lower house prices, as well as the fragile structure of contracts discussed in the previous chapter. The result was a self-reinforcing cycle of foreclosures and weaker house prices. As lenders’ financial positions weakened, the flow of new credit fell to historic lows. By March 1933, the housing and mortgage markets in the U.S. were in a downward spiral with no end in sight.

Keywords:   Foreclosure, Default, Double trigger, House prices, Income declines, Credit, Housing crisis, Housing bust

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