Richmond Fed Economic Brief

EB 09-09, September 2009

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headshot of Marianna Kudlyak

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

by Andra C. Ghent, Marianna Kudlyak, and Stephen Slivinski

Abstract

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.

Full Essay

Category

Consumer Finance
Financial Markets and Institutions

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.