The impact of financial crisis on the home ownership and social stability

Financial crisis, an outcome of default and credit risk is a new phenomenon currently sweeping through the credit markets throughout world especially in Europe and USA. These crisis which began with bursting of house bubble and other high default rates on ‘sub-prime, B-paper loans, adjustable rate and other mortgage loans made to high risk sub-prime borrowers’, has forced many financial giants to file their petition for insolvency. More so, the crisis has rendered large number of people homeless due to foreclosure and has brought social instability among various communities. In present paper, a modest attempt has been made to examine the impact of financial crisis on homeownership, mortgage delinquency and also vulnerable position of families with respect to social stability. The major objective of the study is to demonstrate that how financial crisis have affected the homeownership and thereby had disturbed the social set up of various communities. The comparative analysis has used to analyze the delinquency rates, home equity, property values and mortgage rate. Further, level of foreclosure rate has been studied through use of regression analysis. The findings of the regression analysis have shown that employment growth and housing price appreciation has significant relationship with foreclosure rates. In addition to these findings, the study draws insight into the impact of foreclosure crisis on social stability among various communities.