by Alan White
Following up on our prior studies, we have posted a new paper finding that states with effective anti-predatory mortgage lending laws had fewer risky subprime loan originations and lower default and foreclosure rates than states without effective laws. This new paper relies on loan-level data for 1.2 million mortgages observed monthly through 2008, and standard regression analysis to control for non-legal variables differing between states with and without effective laws. The effectiveness of state laws holds both at the state-wide level and when looking at metropolitan areas on borders between states with and without effective laws.
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