Credit expansion and socio-economic heterogeneity of debtors in foreclosure : the case of Sweden 2000–2014

Credit expansion is the trend of households gaining access to more credit. It is correlated with increasing socio-economic heterogeneity of indebted homeowners. Increasing heterogeneity implies that a more diverse span of homeowners is put at risk of foreclosure. This empirical study explores socio-economic heterogeneity in the case of Swedish debtors in foreclosure between 2000 and 2014. Employing individual-level data, the study observes variability over time for socio-economic variables within and between three groups of debtors with mortgage, consumer, and tax debt, respectively. The results indicate that there were trends towards increasing socio-economic heterogeneity within these three groups and that these trends were particularly strong among the group with mortgage debt. For the mortgage debt group, a greater number of socio-economically weak debtors entering foreclosure over time drives increasing heterogeneity. The discussion focuses on the role of increasing scope—access to credit for previously excluded households—and increasing scale—more access to credit generally—in explaining these findings.