Lenders and investors incur financial losses arising from the litigation expenses associated with the foreclosure process and the loss on the defaulted mortgage when the foreclosed property sells at a liquidation price that is substantially less than the loan balance. Local governments must contend with lower property tax revenue and the ramifications of neglected properties that may threaten public safety.
Jens Weidmann: Managing macroprudential and monetary policy – a challenge for central banks Speech by Dr Jens Weidmann, President of the Deutsche Bundesbank, at the SUERF/Deutsche Bundesbank Conference 2011/IMFS – The ESRB at 1, Berlin, 8 November 2011. * 1.