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摘要

The current global recession began with a sharp rise in mortgage defaults and falling house prices. The sheer volume of delinquencies raises the fear that impending foreclosures will further destabilize an already distressed housing market. For example, foreclosures can lead to significant deadweight losses due to poor maintenance of vacant homes. Similarly, the fire sale of foreclosed homes can further drive down prices in the neighborhood, triggering more defaults and potential foreclosures.