The Journal of Real Estate Finance and Economics

, Volume 49, Issue 3, pp 303–328 | Cite as

State Foreclosure Laws and Mortgage Origination in the Subprime

  • Quinn Curtis


Foreclosure procedures in some states are considerably swifter and less costly for lenders than in others. In light of the foreclosure crisis, an empirical understanding of the effect of foreclosure procedures on the mortgage market is critical. This study finds that lender-favorable foreclosure procedures are associated with more lending activity in the subprime market. The study uses hand-coded state foreclosure law variables to construct a numerical index measuring the favorability of state foreclosure laws to lenders. Mortgage origination data from state-border areas shows that lender-friendly foreclosure is associated with an increase in subprime originations, but has less effect on the prime market.


Foreclosure Foreclosure procedure Foreclosure law Subprime lending Mortgage origination Real estate finance Real estate economics 


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.University of Virginia School of LawCharlottesvilleUSA

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