Foreclosures: Relationship Lending in the Consumer Market and its Aftermath

41 Pages Posted: 13 Dec 2006

Date Written: December 2006

Abstract

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

Ergungor, Ozgur Emre, Foreclosures: Relationship Lending in the Consumer Market and its Aftermath (December 2006). FRB of Cleveland Working Paper No. 06-17. Available at SSRN: https://ssrn.com/abstract=951258 or http://dx.doi.org/10.2139/ssrn.951258

Ozgur Emre Ergungor (Contact Author)

affiliation not provided to SSRN

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