Borrowers in states with non-recourse mortgage law face limited liability on their mortgage loans. We show that non-recourse law causes larger swings in housing prices by encouraging speculative investments when housing markets are in a boom cycle. We find that mortgage lending pricing does not...

This paper uses transactions-level deeds records to examine how out-of-town second house buyers contributed to mispricing in the housing market. We document that out-of-town second house buyers behaved like misinformed speculators and drove up both house price and implied-to-actual rent ratio...