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Get The Housing Crisis And Bankruptcy Reform - Faculty - The ... - Faculty Chicagobooth

Y of Chicago Booth School of Business, NBER & CEPR Abstract The housing crisis threatens to destroy hundreds of billions of dollars of value by causing homeowners with negative equity to walk away from their houses. We advocate a legal reform that would allow homeowners to reduce principal while giving mortgage holders an equity interest. Such a plan would give homeowners an incentive to keep or resell their homes, thus reducing the market value loss of homes while protecting the effective value.

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