Foreclosures: Relationship Lending in the Consumer Market and its Aftermath
41 Pages Posted: 13 Dec 2006
Date Written: December 2006
Relationship lending theory suggests that lenders in close proximity to their borrowers might be the most efficient providers of screening and monitoring services, because the cost of collecting information declines with distance. In agreement with this theory, I present evidence that ties bank branch presence to borrower performance in the low-income housing market, which provides support for this theory.
Keywords: Foreclosure, branch presence, relationship lending, branch proximity
JEL Classification: D82, G21, G28, R31
Suggested Citation: Suggested Citation