Document Type
Article
Language
eng
Format of Original
22 p.
Publication Date
9-2012
Publisher
Springer
Source Publication
Atlantic Economic Journal
Source ISSN
0197-4254
Abstract
Mounting 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.
Recommended Citation
Bostic, Raphael W.; Chomsisengphet, Souphala; Engel, Kathleen C.; McCoy, Patricia A.; Pennington-Cross, Anthony; and Wachter, Susan M., "Mortgage Product Substitution and State Anti-predatory Lending Laws: Better Loans and Better Borrowers?" (2012). Finance Faculty Research and Publications. 86.
https://epublications.marquette.edu/fin_fac/86
Comments
Accepted version. Atlantic Economic Journal, Vol. 40, No. 3 (September 2012): 273-294. DOI. © 2012 Springer. Used with permission.
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