Research

Economic Brief

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September 2009, No. 09-09

Deterring Default: Why Some State Laws Decrease the Probability of Mortgage Foreclosures

Andra C. Ghent
Marianna Kudlyak
Stephen Slivinski

Our Research Focus: Consumer Finance, Financial Regulation

Topics: Consumer Finance, Financial Regulation, Mortgages, Financial Legislation, Housing Finance Policy, Housing

Many states give mortgage lenders strong legal means by which to pursue debt collection in the event of a mortgage default. In those states, probability of default is lower and the forms the default takes are often quite different from a costly conventional foreclosure.

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Additional Resources

Ghent, Andra C., and Marianna Kudlyak. "Recourse and Residential Mortgage Default: Theory and Evidence from U.S. States." Federal Reserve Bank of Richmond Working Paper 09-10, July 2009.