Predatory lending and the subprime crisis

• 成果类型: Article
• 署名作者: Agarwal, Sumit; Amromin, Gene; Ben-David, Itzhak; Chomsisengphet, Souphala; Evanoff, Douglas D.
• 署名单位: National University of Singapore; Federal Reserve System - USA; Federal Reserve Bank - Chicago; University System of Ohio; Ohio State University; National Bureau of Economic Research; United States Department of the Treasury; Office of the Comptroller of the Currency
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.02.008
• 发表日期: 2014
• 页码: 29-52
• 关键词: Predatory lending; Subprime crisis; household finance; default

摘要

We measure the effect of a 2006 antipredatory pilot program in Chicago on mortgage default rates to test whether predatory lending was a key element in fueling the subprime crisis. Under the program, risky borrowers or risky mortgage contracts or both triggered review sessions by housing counselors who shared their findings with the state regulator. The pilot program cut market activity in half, largely through the exit of lenders specializing in risky loans and through a decline in the share of subprime borrowers. Our results suggest that predatory lending practices contributed to high mortgage default rates among subprime borrowers, raising them by about a third. (C) 2014 Elsevier B.V. All rights reserved.