Commercial Banks and Real Estate Lending: The Texas Experience

Journal of Regulatory Economics, 1996

31 Pages Posted: 14 Apr 1998 Last revised: 3 Nov 2008

See all articles by Rebel A. Cole

Rebel A. Cole

Florida Atlantic University

Robert Eisenbeis Eisenbeis

Independent

Paul M. Horvitz

University of Houston - C.T. Bauer College of Business

Date Written: July 26, 1996

Abstract

This study analyzes the performance of Texas commercial banks specializing in mortgage lending during the late 1980s and early 1990s to investigate how representative was their experience as compared with that of banks across the country concentrating in real estate lending. The results show that Texas real estate banks (REBs) performed very poorly during the 1980s and early 1990s, but this was because the Texas REBs were clearly different from the majority of the banks classified as REBs in the rest of the country. Texas REBs invested more heavily in commercial mortgages than did other banks. In a poor real estate market, these loans performed very poorly. The analysis indicates that the Texas experience is not a basis for rejecting the view that the commercial banking industry can safely replace the declining thrift industry as a major source of residential mortgage financing.

JEL Classification: G21, G28

Suggested Citation

Cole, Rebel A. and Eisenbeis, Robert Eisenbeis and Horvitz, Paul M., Commercial Banks and Real Estate Lending: The Texas Experience (July 26, 1996). Journal of Regulatory Economics, 1996. Available at SSRN: https://ssrn.com/abstract=7702

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Robert Eisenbeis Eisenbeis

Independent ( email )

No Address Available

Paul M. Horvitz

University of Houston - C.T. Bauer College of Business

Melcher Hall-230G
Houston, TX 77204-6021
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
82
Abstract Views
1,389
rank
299,272
PlumX Metrics