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In housing crises, high mortgage debt can feed a vicious circle of falling housing prices and declining consumption and incomes, leading to higher mortgage defaults and deeper recessions. In such situations, resolution policies may need to be adapted to help contain negative feedback loops while minimizing overall loan losses and moral hazard. Drawing on recent experiences from Iceland, Ireland, Spain, and the United States, this paper discusses how economic trade-offs affecting mortgage resolution differ in crises. Depending on country circumstances, the economic benefits of temporary forbearance and loan modifications for struggling households could outweigh their costs.

Financial crises --- Mortgage loans --- Debt --- Foreclosure --- Debt relief --- Debt renegotiation --- Debt rescheduling --- Debt restructuring --- Relief, Debt --- Renegotiation, Debt --- Rescheduling, Debt --- Restructuring, Debt --- Debtor and creditor --- Foreclosure sales --- Mechanics' lien foreclosure --- Mortgage foreclosure --- Statutory foreclosure --- Strict foreclosure --- Executions (Law) --- Judicial sales --- Mechanics' liens --- Mortgages --- Indebtedness --- Finance --- Home loans --- Mortgage lending --- Real estate loans --- Loans --- Secondary mortgage market --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Law and legislation --- Exports and Imports --- Financial Risk Management --- Real Estate --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Financial Institutions and Services: Government Policy and Regulation --- Housing Supply and Markets --- Debt Management --- Sovereign Debt --- International Lending and Debt Problems --- Property & real estate --- International economics --- Housing prices --- Debt service --- Financial institutions --- Prices --- Asset and liability management --- External debt --- Housing --- Debts, External --- Ireland