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Mortgage Product Substitution and State Anti-predatory Lending Laws: Better Loans and Better Borrowers?
Atlantic Economic Journal
  • Raphael W. Bostic, University of Southern California
  • Souphala Chomsisengphet, US Department of the Treasury
  • Kathleen C. Engel, Suffolk University
  • Patricia A. McCoy, University of Connecticut - Hartford
  • Anthony Pennington-Cross, Marquette University
  • Susan M Wachter, University of Pennsylvania
Document Type
Format of Original
22 p.
Publication Date

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.


Accepted version. Atlantic Economic Journal, Vol. 40, No. 3 (September 2012): 273-294. DOI. © 2012 Springer. Used with permission.

Citation Information
Raphael W. Bostic, Souphala Chomsisengphet, Kathleen C. Engel, Patricia A. McCoy, et al.. "Mortgage Product Substitution and State Anti-predatory Lending Laws: Better Loans and Better Borrowers?" Atlantic Economic Journal (2012) ISSN: 0197-4254
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