This teaching case provides students with an opportunity to evaluate the best course of action for a firm who just filed for Chapter 11 Bankruptcy protection. The home-builder is already in default on over $20 million in loans. They have homes at various stages of the construction process, and...

Over the last several years, the United States has experienced a significant recession. During this downturn, the number of real estate foreclosures has risen drastically. Recent studies have demonstrated a reduction in property values due to neighboring foreclosures – known as the foreclosure...

Inequity Aversion has long been applied in a game theoretic setting to explain that individuals are willing to sacrifice personal wealth in order to financially penalize players they perceive to be acting selfishly or unfairly. We apply inequity aversion to strategic mortgage default decisions...

This case exposes students to the ethical and legal issues property owners face during eminent domain proceedings in an environment of downward spiraling housing prices (see Exhibit 1 - Federal Housing Finance Agency US house prices index). To date, current federal and state eminent domain laws...

Over the last several years, the United States has experienced a significant recession. During this downturn, the number of real estate foreclosures has risen drastically. Recent studies have demonstrated a reduction in property values due to neighboring foreclosures - known as the foreclosure...

This study identifies a severe gap between the financial backlash borrowers believe awaits them after strategic mortgage default and the reality that lenders rarely pursue deficiency judgments. This, coupled with the social norm finding that borrowers widely view strategic default as immoral,...

Defaulting on a mortgage is widely viewed as being immoral, but no prior study has examined the intervening roles of Prospect Theory and default intent. We find that the public is significantly more accepting of a defaulting borrower who earns a zero or negative return on his investment than one...