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, staff at Neighborworks America, and many market participants from servicers, investors, Freddie Mac, mortgage insurance companies, rating agencies, and legal and tax counsel for helpful discussions and comments. We are also grateful to Erik Hembre and Christina Pinkston for excellent research assistance.

This paper conducts an in-depth analysis of structured finance asset-backed securities collateralized debt obligations (SF ABS CDOs), the subset of CDOs that traded on the ABS CDO desks at the major investment banks and were a major contributor to the August 2007 financial panic. We identify these CDOs with data from Intex ©. We estimate that 727 publicly traded SF ABS CDOs were issued between 1999 and 2007, totaling $641 billion. We describe how and why multi-sector CDOs became subprime CDOs and show why they were so susceptible to catastrophic loss. We then track the flows of subprime bonds into CDOs to document the enormous cross-referencing of subprime BBB bonds and credit default swaps (CDSs) into CDOs. We also show that lower rated tranches of CDOs were not sold and were largely recycled into CDO 2 s and other CDOs. We estimate that total write-downs on SF ABS CDOs will be $420 billion, 65% of the original issuance balance. We then analyze the determinants of expected losses on the deals and AAA bonds and examine the performance of dealers and rating agencies. Finally, we discuss the implications of our findings and the many areas for future work.

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Since the start of the financial crisis, we have seen an extraordinary lengthening of foreclosure timelines, particularly in states that require judicial review to complete a foreclosure but also recently in nonjudicial states. Our analysis synthesizes findings from several lines of research, updates results, and presents new analysis to examine the costs and benefits of judicial foreclosure review. Consistent with previous studies, we find that judicial review imposes large costs with few, if any, offsetting benefits. We also provide early analysis of the new mortgage servicing rules enacted by the Consumer Financial Protection Bureau (CFPB) and find that these rules are contributing to even longer timelines, especially in nonjudicial states.