The Impact of the 2005 Bankruptcy Law on Subprime Mortgage Performance

Posted: 21 May 2019

See all articles by Jie Qun Guo

Jie Qun Guo

Interactive Data Pricing and Reference Data, Inc.

Date Written: April 8, 2010

Abstract

This paper, for the first time investigates the effects of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 on subprime mortgage performance. Based on a large mortgage dataset, the study quantifies that the new legislation successfully reduces the number of subprime mortgage borrowers filing for bankruptcy. However, the new law has significant and negative impacts on subprime mortgage performance. Specifically, it has caused an unnecessarily higher number of foreclosures and reduced the success rate of bankruptcy filings. This has a direct influence on the subprime financial crisis.

Keywords: bankruptcy law, subprime

JEL Classification: G21, G33, K35

Suggested Citation

Guo, Jie Qun, The Impact of the 2005 Bankruptcy Law on Subprime Mortgage Performance (April 8, 2010). https://doi.org/10.3905/jsf.2010.16.1.033, Available at SSRN: https://ssrn.com/abstract=1586555 or http://dx.doi.org/10.2139/ssrn.1586555

Jie Qun Guo (Contact Author)

Interactive Data Pricing and Reference Data, Inc. ( email )

New York, NY 10007
United States

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