Effects of Bankruptcy Exemptions and Foreclosure Laws on Mortgage Default and Foreclosure Rates

Posted: 29 Aug 2013

See all articles by Chintal A. Desai

Chintal A. Desai

Virginia Commonwealth University (VCU)

Gregory Elliehausen

Federal Reserve Board

Jevgenijs Steinbuks

Purdue University - Center for Global Trade Analysis; Center for Robust Decisionmaking on Climate & Energy Policy (RDCEP); World Bank - Development Research Group (DECRG)

Date Written: August 29, 2013

Abstract

This study analyzes the effects of state bankruptcy asset exemptions and foreclosure laws on mortgage default and foreclosure rates across different segments of the mortgage market. We found that the effects of these legal provisions are larger for sub-prime than for prime mortgages and larger for adjustable rate mortgages than for fixed rate mortgages. These results demonstrate that the effects of variation in bankruptcy exemptions and foreclosure laws is most pronounced in the most risky segments of the mortgage market, which are those that have been most affected by the continuing housing slump in the United States.

Keywords: bankruptcy exemptions, foreclosure laws, mortgage defaults, foreclosures

Suggested Citation

Desai, Chintal and Elliehausen, Gregory and Steinbuks, Jevgenijs, Effects of Bankruptcy Exemptions and Foreclosure Laws on Mortgage Default and Foreclosure Rates (August 29, 2013). Journal of Real Estate Finance and Economics, Vol. 47, No. 3, 2013. Available at SSRN: https://ssrn.com/abstract=2317988

Chintal Desai

Virginia Commonwealth University (VCU) ( email )

1015 Floyd Avenue
Richmond, VA 23284
United States

Gregory Elliehausen

Federal Reserve Board ( email )

20th and C Streets, NW
Washington, DC 20551
United States
202-452-2326 (Phone)

Jevgenijs Steinbuks (Contact Author)

Purdue University - Center for Global Trade Analysis ( email )

1145 Krannert Building
West Lafayette, IN 47907
United States

Center for Robust Decisionmaking on Climate & Energy Policy (RDCEP) ( email )

5735 S. Ellis Street
Chicago, IL 60637
United States

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
248
PlumX Metrics