Does mortgage deregulation increase foreclosures? Evidence from Cleveland

Research output: Contribution to journalArticlepeer-review


This paper examines how relaxing a local anti-predatory lending law for mortgages affects foreclosures. The empirical evidence is drawn from a quasi experiment in Cleveland, Ohio, where the State Supreme Court repealed an ordinance that imposed lending restrictions on home mortgages of high annual percentage rates (APRs). Empirical evidence shows that observable loan and borrower characteristics were not affected by the repeal, nor did the overall originations appear to increase; yet the APRs were 20% more likely to exceed the regulatory thresholds that were nullified. Moreover, the foreclosure rate increased by six percentage points to 20%.

Original languageEnglish (US)
Pages (from-to)126-139
Number of pages14
JournalRegional Science and Urban Economics
Issue number1
StatePublished - May 2014


  • Consumer financial protection
  • Home foreclosures
  • Mortgage regulation
  • Predatory lending

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies


Dive into the research topics of 'Does mortgage deregulation increase foreclosures? Evidence from Cleveland'. Together they form a unique fingerprint.

Cite this