Mortgage Product Substitution and State Anti-predatory Lending Laws: Better Loans and Better Borrowers?
AbstractMounting foreclosures and disclosures of abusive lending practices led many states to adopt new anti-predatory lending (APL) laws. Researchers have examined the impact of such laws on credit flows and the cost of credit. This research extends the literature by examining whether the market responded to these laws by substituting different mortgage products for those restricted by APL provisions. The evidence indicates that the laws were effective in restricting loans with targeted characteristics, and that the market substituted other product types to maintain access to credit and affordability in the face of these restrictions. The laws reduced the involvement of investor and second home purchases but appeared to impact borrower credit scores or down payments. Copyright International Atlantic Economic Society 2012
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Bibliographic InfoArticle provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.
Volume (Year): 40 (2012)
Issue (Month): 3 (September)
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More information through EDIRC
Mortgage; Predatory; Laws; Substitution; D04; D14; D18; G28; H70; K40; K42;
Find related papers by JEL classification:
- D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- D18 - Microeconomics - - Household Behavior - - - Consumer Protection
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
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