State Foreclosure Laws and Mortgage Origination in the Subprime Market

46 Pages Posted: 27 Jul 2013

See all articles by Quinn Curtis

Quinn Curtis

University of Virginia School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: July 26, 2013


Foreclosure procedures in some states are considerably swifter and less costly for lenders than in others. In light of the foreclosure crisis, an empirical understanding of the effect of foreclosure procedures on the mortgage market is critical. This study finds that lender-favorable foreclosure procedures are associated with more lending activity in the subprime market. The study uses hand-coded state foreclosure law variables to construct a numerical index measuring the favorability of state foreclosure laws to lenders. Mortgage origination data from state-border areas shows that lender-friendly foreclosure is associated with an increase in subprime originations, but has less effect on the prime market.

Keywords: foreclosure, foreclosure procedure, foreclosure law, subprime lending, mortgage origination, real estate finance, real estate economics

JEL Classification: G21, G28

Suggested Citation

Curtis, Quinn, State Foreclosure Laws and Mortgage Origination in the Subprime Market (July 26, 2013). Journal of Real Estate Finance and Economics, Forthcoming, Available at SSRN:

Quinn Curtis (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

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