REGULATORY ENVIRONMENT AND MORTGAGE MARKETS: PERSPECTIVES OF LENDERS, BORROWERS AND BROKERS

Abstract

THE SUBSTANTIAL VICISSITUDES IN THE U.S. LOAN MARKET TAKEN PLACE IN THE PAST DECADE PROVIDE AN IDEAL LABORATORY PLATFORM TO STUDY RESIDENTIAL MORTGAGE LENDING. MY DISSERTATION CONSISTS OF THREE EMPIRICAL STUDIES THAT INTEND TO IMPROVE THE UNDERSTANDING OF HOW LENDERS, BORROWERS, AND MORTGAGE BROKERS ADJUST THEIR RESPECTIVE BEHAVIOR ACCORDING TO CHANGES IN THE OVERALL LENDING ENVIRONMENT IN MORTGAGE MARKETS. FIRST, I INVESTIGATE MORTGAGE LENDERS' BEHAVIOR IN PRICING PRIME LOANS AND EXPLORE HOW THE PRICING STRATEGY EVOLVES OVER TIME. HAVING IDENTIFIED SUGGESTIVE EVIDENCE OF MISALIGNED LENDERS' BEHAVIOR INDUCED BY THE EXPANSION IN MORTGAGE SECURITIZATION IN THE MID-2000S, I NEXT SHIFT THE FOCUS TO MORTGAGE LENDERS AND BORROWERS? RESPONSES TO THREE TYPES OF FORECLOSURE LAWS THAT WERE DESIGNED TO PROTECT DELINQUENT BORROWERS. LASTLY, I LOOK INTO THE MORTGAGE BROKERS? BEHAVIOR, THE INTERMEDIARIES THAT MATCH A PROSPECTIVE BORROWER TO A LENDER, AND EXPLICITLY EXAMINE HOW DIFFERENT TYPES OF BRO