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Publications
  • September 2021
  • Article
  • Journal of Financial Economics

Did Technology Contribute to the Housing Boom? Evidence from MERS

By: Stefan Lewellen and Emily Williams
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Abstract

We examine the effects of the Mortgage Electronic Registration System, or MERS, on mortgage origination volumes and foreclosure rates prior to the Great Recession. MERS was introduced in the late 1990s and significantly reduced the cost and time associated with secondary loan sales. Using novel data from the Massachusetts Registry of Deeds, we show that the introduction of MERS led to an expansion in credit supply that was primarily fueled by non-bank lenders originating loans to low-income borrowers. We also find that foreclosure rates were higher on these loans. Our paper provides a new explanation for why credit supply increased prior to the 2008 financial crisis and why supply increases were larger in low-income areas.

Keywords

Credit Supply; Housing Boom; Financial Innovation; Nonbank Lenders; Mortgages; Credit; Expansion; Information Technology; Outcome or Result

Citation

Lewellen, Stefan, and Emily Williams. "Did Technology Contribute to the Housing Boom? Evidence from MERS." Journal of Financial Economics 141, no. 3 (September 2021): 1244–1261.
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About The Author

Emily Williams

Finance
→More Publications

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More from the Authors
  • Buy Now, Pay Later Credit: User Characteristics and Effects on Spending Patterns By: Marco Di Maggio, Emily Williams and Justin Katz
  • The Cross Section of Bank Value By: Mark Egan, Stefan Lewellen and Adi Sunderam
  • Esusu: Solving Homelessness Backwards By: Marco Di Maggio and Emily Williams
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