About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

80 U. Colo. L. Rev. 1 (2009)
The Law and Economics of Subprime Lending

handle is hein.journals/ucollr80 and id is 3 raw text is: UNIVERSITY OF COLORADO LAW REVIEW Volume 80, Issue 1 2009 THE LAW AND ECONOMICS OF SUBPRIME LENDING TODD J. ZYWICKI* & JOSEPH D. ADAMSON The collapse of the subprime mortgage market has led to calls for greater regulation to protect homeowners from un- wittingly trapping themselves in high-cost loans that lead to foreclosure, bankruptcy, or other financial problems. Weigh- ed against the losses of the widespread foreclosure crisis are the benefits of financial modernization that have accrued to many American families who have been able to become homeowners who otherwise would not have access to mort- gage credit. The bust of the subprime mortgage market has resulted in high levels of foreclosures and unparalleled prob- lems on Wall Street. However, the boom generated unprece- dented levels of homeownership, especially among young, low-income, and minority borrowers, putting them on a road to economic comfort and stability. Sensible regulation of subprime lending should seek to curb abusive practices while preserving these benefits. This Article reviews the theories and evidence regarding the causes of the turmoil in the subprime market. It then turns to the question of the rising number of foreclosures in the subprime market in order to understand the causes of rising * Professor of Law, George Mason University School of Law; Affiliated Scholar, Mercatus Center, George Mason University; Searle Fellow, George Mason Uni- versity School of Law (Fall 2008). Professor Zywicki is a 2008-09 W. Glenn Campbell and Rita Ricardo-Campbell National Fellow and the Arch W. Shaw Na- tional Fellow at the Hoover Institution. The authors would like to thank Bruce Johnsen, Ted Murphy, Josh Wright, and participants in the George Mason Uni- versity Levy Workshop for comments, and the Mercatus Center, the Law & Eco- nomics Center at George Mason University, and the Searle Freedom Trust for fi- nancial support, and Kimberly White for research assistance. ** Research Associate, Mercatus Center, George Mason University; Student, Uni- versity of Michigan Law School.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most