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Deficiency Judgments as a Mortgage Pricing Factor

Author

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  • Pruszkowski Tomasz

    (Department of Capital Markets, Warsaw School of Economics, Warszawa, Poland)

Abstract

The subject of the deficiency judgments has been poorly examined due to a lack of relevant data and the complexity of the issue. Some comprehensive studies have explored whether allowing deficiency judgments decreases the likelihood of strategic defaults in the U. S. mortgage market. Little, however, has been done to determine whether there is any direct correlation between legal standing allowing recourse and loan pricing. Hence, additional work regarding this subject is needed.This study seeks to fill this gap by exploring the impact of allowing deficiency judgments on mortgage pricing policy in various U. S. states. Seven distinctive mortgage types in two groups of states were compared. We conclude that there is no statistically significant difference between recourse and non-recourse states in terms of mortgage pricing, regardless of mortgage type.

Suggested Citation

  • Pruszkowski Tomasz, 2017. "Deficiency Judgments as a Mortgage Pricing Factor," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 53(2), pages 57-68, June.
  • Handle: RePEc:vrs:ijomae:v:53:y:2017:i:2:p:57-68:n:5
    DOI: 10.1515/ijme-2017-0012
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    References listed on IDEAS

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    5. Li, Wenli & Oswald, Florian, 2017. "Recourse and residential mortgages: The case of Nevada," Journal of Urban Economics, Elsevier, vol. 101(C), pages 1-13.
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    11. Wenli Li & Florian Oswald, 2014. "Recourse and the Residential Mortgage Market: the Case of Nevada," Working Papers hal-03460402, HAL.
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    Cited by:

    1. Sá, Ana Isabel, 2020. "To change or not to change: the impact of the law on mortgage origination," MPRA Paper 104818, University Library of Munich, Germany.

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    More about this item

    Keywords

    deficiency judgment; recourse and non-recourse mortgages; mortgage pricing policies;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K25 - Law and Economics - - Regulation and Business Law - - - Real Estate Law
    • K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law

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