This paper examines pricing of subprime first mortgages by brokers and lenders using data on loans in originated between the first quarter of 1998 to the first quarter of 2006 at seven large subprime mortgage lenders. The results provide little evidence that most consumers obtaining mortgages...

Research conducted many years ago that indicated substantial cost economies of loan size in consumer lending. This finding implies that low interest rate ceilings make small loan sizes unprofitable and will not be available in the marketplace. Furthermore, research indicates that demanders of...

The boom in the subprime mortgage market yielded many loans with high LTV ratios. From a large proprietary database on subprime mortgages, we find that choice of mortgage rate type is not linear in loan sizes. A fixed rate mortgage contract is a popular choice when loan size, measured by LTV...