Polarized State Politics, Stable Mortgage Markets

45 Pages Posted: 17 May 2019 Last revised: 5 Dec 2019

See all articles by Brian D. Feinstein

Brian D. Feinstein

University of Pennsylvania, The Wharton School

Chen Meng

University of Chicago - Law School

Manisha Padi

University of California, Berkeley - School of Law

Date Written: 2019

Abstract

Mortgage markets and their regulation have been a focus of increasingly polarized political debates, reflected in an academic literature showing the impact of partisan politics on financial markets. Since the financial crisis, states have played an increasing role in regulating mortgage markets, due to the growth of nationwide litigation by state attorneys general and the expansion of “shadow” non-bank lenders who are primarily regulated by the states. We study whether real mortgage lending and performance outcomes are affected by state party politics, independent of national conditions. We document that significant average differences between states with Democratic and Republican governors and AGs in lending quantity, quality, and performance can be largely explained by macroeconomic trends. The results suggest that state party politics do not have a significant material impact on mortgage markets. Thus, the results cast doubt on the notion that regulatory regimes that rely on state enforcement will face divisive political obstacles.

Keywords: mortgage lending, consumer protection, consumer law, empirical legal studies, mortgage finance, attorney general, financial regulation

JEL Classification: D14, D18, D72, G21, K22, P16

Suggested Citation

Feinstein, Brian D. and Meng, Chen and Padi, Manisha, Polarized State Politics, Stable Mortgage Markets (2019). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 882; U of Chicago, Public Law Working Paper . Available at SSRN: https://ssrn.com/abstract=3385963 or http://dx.doi.org/10.2139/ssrn.3385963

Brian D. Feinstein (Contact Author)

University of Pennsylvania, The Wharton School ( email )

3730 Walnut Street
Suite 600
Philadelphia, PA 19104-6365
United States

Chen Meng

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

Manisha Padi

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
83
Abstract Views
660
rank
309,278
PlumX Metrics