Working Paper #804
Lending Competition and Non-Traditional Mortgages*
Arthur Acolin · Xudong An · Susan M. Wachter
Non-Traditional Mortgages Recession
We provide new perspectives on the rampant growth of non-traditional mortgages (NTMs) prior to the Great Recession by showing that local lending competition contributed significantly to the early growth of NTMs while growth of and non-bank lending. We also find that state level anti-predatory lending laws were more (less) effective in restraining the origination of NTMs in markets with higher (lower)levels of lending concentration and therefore lower (higher) competitive pressure.