An Economic Theory of Mortgage Redemption Laws

Matthew Baker (), Thomas Miceli () and C.F. Sirmans

Real Estate Economics, 2008, vol. 36, issue 1, pages 31-45

Abstract: Redemption laws give mortgagors the right to redeem their property following default for a statutorily set period of time. This article develops a theory that explains these laws as a means of protecting landowners against the loss of nontransferable values associated with their land. A longer redemption period reduces the risk that this value will be lost but also increases the likelihood of default. The optimal redemption period balances these effects. Empirical analysis of cross-state data from the early twentieth century suggests that these factors, in combination with political considerations, explain the existence and length of redemption laws. Copyright 2008 American Real Estate and Urban Economics Association

Downloads: (external link)
http://www.blackwell ... 40-6229.2008.00205.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: An Economic Theory of Mortgage Redemption Laws (2006)
Working Paper: An Economic Theory of Mortgage Redemption Laws (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1080-8620

Access Statistics for this article

Real Estate Economics is edited by Crocker Liu, N. Edward Coulson and Walter Torous

More articles in Real Estate Economics from American Real Estate and Urban Economics Association
Series data maintained by Christopher F. Baum ().