Regulation of Subprime Mortgage Products: An Analysis of North Carolina's Predatory Lending Law

Posted: 11 Feb 2004

See all articles by Gregory Elliehausen

Gregory Elliehausen

George Washington University - Financial Services Research Program

Michael Staten

Georgetown University - Credit Research Center

Abstract

This paper estimates the effect of North Carolina's high-cost mortgage law on the subprime mortgage market in that state. The results indicate that creditors sharply restricted lending to higher risk consumers in North Carolina following passage of the law. Creditors did not restrict lending in neighboring states or to lower risk consumers in North Carolina. These results suggest that the restriction in North Carolina was due to rationing in response to higher costs imposed by the law. The findings of this study are of importance beyond North Carolina. Other states and municipalities have proposed or passed similar or more restrictive laws. These laws risk taking back some of the gains in credit availability that lower income and higher risk consumers gained in the 1990s.

JEL Classification: G21, G28

Suggested Citation

Elliehausen, Gregory and Staten, Michael, Regulation of Subprime Mortgage Products: An Analysis of North Carolina's Predatory Lending Law. Journal of Real Estate Finance & Economics, Vol. 29, No. 4. Available at SSRN: https://ssrn.com/abstract=497184

Gregory Elliehausen (Contact Author)

George Washington University - Financial Services Research Program ( email )

Duques Hall, Suite 551
2201 G Street, NW
Washington, DC 20052
United States
202-994-0892 (Phone)
202-994-0907 (Fax)

Michael Staten

Georgetown University - Credit Research Center ( email )

3420 Prospect Street, NW - Suite 300
Washington, DC 20057
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,103
PlumX Metrics