10.17889/E115465
Mitman, Kurt
Replication data for: Macroeconomic Effects of Bankruptcy and Foreclosure Policies
ICPSR Inter-university Consortium for Political and Social Research
2016
10.1257/aer.20120512
10.1257/aer.20120512
V0
I study the implications of two major debt-relief policies in the United States: the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and the Home Affordable Refinance Program (HARP). To do so, I develop a model of housing and default that includes relevant dimensions of credit-market policy and captures rich heterogeneity in household balance sheets. The model also explains the observed cross-state variation in consumer default rates. I find that BAPCPA significantly reduced bankruptcy rates, but increased foreclosure rates when house prices fell. HARP reduced foreclosures by 1 percentage point and provided substantial welfare gains to households with high loan-to-value mortgages.