Do borrower rights improve borrower outcomes?: evidence from the foreclosure process

Kristopher Gerardi, Lauren Lambie-Hanson and Paul Willen

No 11-9, Public Policy Discussion Paper from Federal Reserve Bank of Boston

Abstract: The authors evaluate laws designed to protect borrowers from foreclosure. They find that these laws delay but do not prevent foreclosures. They first compare states that require lenders to seek judicial permission to foreclose with states that do not. Borrowers in judicial states are no more likely to cure and no more likely to renegotiate their loans, but the delays lead to a buildup in these states of persistently delinquent borrowers, the vast majority of whom eventually lose their homes. They next analyze a \"right-to-cure\" law instituted in Massachusetts on May 1, 2008. Using a difference-in-differences approach to evaluate the effect of the policy, they compare Massachusetts with neighboring states that did not adopt similar laws. They find that the right-to-cure law lengthens the foreclosure timeline but does not lead to better outcomes for borrowers.

Keywords: Foreclosure (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Do borrower rights improve borrower outcomes? Evidence from the foreclosure process (2013)
Working Paper: Do borrower rights improve borrower outcomes? Evidence from the foreclosure process (2011)
Working Paper: Do Borrower Rights Improve Borrower Outcomes? Evidence from the Foreclosure Process (2011)
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