The Journal of Real Estate Finance and Economics

, Volume 47, Issue 3, pp 391–415

Effects of Bankruptcy Exemptions and Foreclosure Laws on Mortgage Default and Foreclosure Rates

  • Chintal A. Desai
  • Gregory Elliehausen
  • Jevgenijs Steinbuks


This study analyzes the effects of state bankruptcy asset exemptions and foreclosure laws on mortgage default and foreclosure rates across different segments of the mortgage market. We found that the effects of these legal provisions are larger for subprime than for prime mortgages and larger for adjustable rate mortgages than for fixed rate mortgages. These results demonstrate that the effect of variation in bankruptcy exemptions and foreclosure laws is most pronounced in the most risky segments of the mortgage market, which are those that have been most affected by the continuing housing slump in the United States.


Bankruptcy exemptions Foreclosure laws Mortgage defaults Foreclosures 

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Chintal A. Desai
    • 1
  • Gregory Elliehausen
    • 2
  • Jevgenijs Steinbuks
    • 3
  1. 1.University of Texas–Pan AmericanEdinburgUSA
  2. 2.Board of Governors of the Federal Reserve SystemWashingtonUSA
  3. 3.Purdue UniversityWest LafayetteUSA

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