Geographic Variation in Subprime Loan Features, Foreclosures, and Prepayments
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Author/Creator ORCID
Date
2013-05-13
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Citation of Original Publication
Morgan J. Rose, Geographic Variation in Subprime Loan Features, Foreclosures, and Prepayments, The Review of Economics and Statistics 2013 95:2, 563-590, https://doi-org.proxy-bc.researchport.umd.edu/10.1162/REST_a_00256
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This publisher erronesously believes that this was written as part of one of the author's official duties as an Employee of the United States Government and is therefore a work of the United States Government, and has published it on a public domain licenese.
Public Domain Mark 1.0
This publisher erronesously believes that this was written as part of one of the author's official duties as an Employee of the United States Government and is therefore a work of the United States Government, and has published it on a public domain licenese.
Subjects
Abstract
Using data on subprime mortgages from ten cities, I examine geographic variation in the effects of prepayment penalties, balloon loans, and reduced documentation on the probabilities of foreclosure and prepayment. Results indicate that across cities, reduced documentation is consistently related to higher probabilities of foreclosure, and prepayment penalties are consistently related to lower probabilities of prepayment. Prepayment penalties and balloon loans are more sporadically associated with foreclosures, and reduced documentation and balloon loans are more sporadically associated with prepayments. These results are robust to controls for several state antipredatory lending law provisions, whose effects are also tested.