Document Type

Article

Publication Date

Summer 2008

Source Publication

Real Estate Economics

Abstract

Various states and other local jurisdictions have enacted laws intending to reduce predatory and abusive lending in the subprime mortgage market. These laws have created substantial geographic variation in the regulation of mortgage credit. This article examines whether these laws are associated with a higher or lower cost of credit. Empirical results indicate that the laws are associated with at most a modest increase in cost. However, the impact depends on the product type. In particular, loans with fixed (adjustable) rates are associated with a modest increase (decrease) in cost.

Comments

Originally published in Real Estate Economics, Volume 36, No. 2 (Summer 2008), online at: http://dx.doi.org/10.1111/j.1540-6229.2008.00211.x