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Article
Mortgage Product Substitution and State Anti-Predatory Lending Laws: Better Loans and Better Borrowers?
Atlantic Economic Journal (2012)
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.

Publication Date
2012
Publisher Statement
The final publication is available at Springer via http://dx.doi.org/10.1007/s11293-012-9325-3.
Citation Information
"Mortgage Product Substitution and State Anti-Predatory Lending Laws: Better Loans and Better Borrowers?" Atlantic Economic Journal Vol. 40 Iss. 3 (2012) p. 273
Available at: http://works.bepress.com/patricia_mccoy1/4/