Predatory Lending Laws and the Cost of Credit

Anthony Pennington‐Cross and Giang Ho
Authors registered in the RePEc Author Service: Anthony N. Pennington-Cross

Real Estate Economics, 2008, vol. 36, issue 2, 175-211

Abstract: Various states and other local jurisdictions have enacted laws intending to reduce predatory and abusive lending in the subprime mortgage market. These laws have created substantial geographic variation in the regulation of mortgage credit. This article examines whether these laws are associated with a higher or lower cost of credit. Empirical results indicate that the laws are associated with at most a modest increase in cost. However, the impact depends on the product type. In particular, loans with fixed (adjustable) rates are associated with a modest increase (decrease) in cost.

Date: 2008
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https://doi.org/10.1111/j.1540-6229.2008.00211.x

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Working Paper: Predatory lending laws and the cost of credit (2006)
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