Regulating zombie mortgages / Jonathan Lee, Duc Duy Nguyen, Huyen Nguyen ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
Loading...
Download1.2 MB
Regulating zombie mortgages
Discovery
1891049496
URN
urn:nbn:de:gbv:3:2-1065469
DOI
ISBN
ISSN
Koordinaten
Skalierung
dc.contributor.contributor
Other contributor
Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, June 2024
Content
1 Online-Ressource (III, 54 Seiten, 1,19 MB) : Diagramme
Edition
Language
eng
Comment
Literaturverzeichnis: Seite 34-36
Abstract
Using the adoption of Zombie Property Law (ZL) across several US states, we show that increased lender accountability in the foreclosure process affects mortgage lending decisions and standards. Difference-in-differences estimations using a state border design show that ZL incentivizes lenders to screen mortgage applications more carefully: they deny more applications and impose higher interest rates on originated loans, especially risky loans. In turn, these loans exhibit higher ex-post performance. ZL also affects lender behavior after borrowers become distressed, causing them to strategically keep delinquent mortgages alive. Our findings inform the debate on policy responses to foreclosure crises.
Series
IWH-Diskussionspapiere ; 2024, no. 16 (June 2024) ppn:837399270