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There are growing concerns about the way predatory mortgages erode housing equity. We examine another potential impact: the relationship between abusive loan terms and foreclosure. Do predatory characteristics increase the likelihood of foreclosure once other risk factors are taken into account? We use a national database of subprime refinance first-lien loans originated in 1999 to analyze this question.Even after we control for other factors, refinance loans with prepayment penalties are 20 percent more likely and those with balloon payments are 50 percent more likely to experience a foreclosure than other loans. These findings suggest that predatory loans have the potential not only to erode household wealth, but also to heighten negative effects on individuals, households, and communities. Excluding losses to borrowers, we estimate that prepayment penalties and balloon payment requirements in 1999 refinance originations increased national foreclosure-related losses to lenders and investors by about $465 and $127 million, respectively.

Objective: To provide New Zealand population norms for version 2 of the SF-36 and SF-12 health surveys and report scoring coefficients that enable

This article examines changes in subprime mortgage originations before and after the implementation of North Carolina's Predatory Lending Law. Previous studies have noted a decline in overall subprime lending. This was to be expected, since the law was intended to reduce the number of predatory or abusive subprime loans. But which components of subprime lending declined, which remained stable or increased, and what happened to those loans that the law defines as predatory?Using a database of 3.3 million loans from 1998 to 2002, we find that the reduction that occurred after the law took effect was entirely due to a decline in refinancing loans and that almost 90 percent of this decline can be traced to a reduction in predatory loans. The law is doing what it was intended to do: eliminate abusive loans without restricting the supply of subprime mortgage capital for borrowers with blemished credit records.

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