Bubb, Ryan; Kaufman, Alex - 2011 - This version: August 30, 2011
research has hypothesized that these cutoff rules result from a securitization rule of thumb. Under this theory, an observed … securitization rule-of-thumb theory but consistent with the origination rule-of-thumb theory. There are jumps in the number of loans … jump in defaults at the cutoff would imply that securitization led to lax screening. We argue instead that originators …