US mortgage and foreclosure law

Zachary K. Kimball and Paul Willen

from Palgrave Macmillan

Abstract: A mortgage is an exchange of a collection of rights between a borrower and a lender. In this article, we describe those rights and explain both their economic logic and their implications for economic analysis and policy. We briefly discuss the medieval origins of the American mortgage contract and its evolution into its present form. We then turn to topics relevant for contemporary economic research – including title and lien theory; recording and registration of documents; judicial versus power-of-sale foreclosure; deficiency judgments and recourse; assignments; the Mortgage Electronic Registration System; and methods for avoiding foreclosure, including deeds-in-lieu and short sales. Our discussion focuses on real property law and its economic implications; we do not discuss, for example, securities law related to mortgage contracts.

Keywords: equity; default; foreclosure; housing; law and economics; mortgage; residential real estate and finance (search for similar items in EconPapers)
JEL-codes: G21 G22 G28 (search for similar items in EconPapers)
Date: 2012
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