Have community banks reduced home foreclosure rates?
AbstractCompared with mortgage brokers and universal banks, community banks have stronger incentives to originate high-quality residential home loans. Using the RealtyTrac database on residential foreclosures between 2005 and 2008, we show that county-level foreclosure rates are lower in counties with greater community bank presence. This finding is robust to a host of county-level economic and demographic control variables and after controlling for possible endogeneity of community bank presence.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Banking & Finance.
Volume (Year): 35 (2011)
Issue (Month): 9 (September)
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Web page: http://www.elsevier.com/locate/jbf
Subprime mortgage loans Community banks Foreclosures Relationship lending Mortgage brokers;
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