IDEAS home Printed from https://ideas.repec.org/a/bla/reesec/v12y1984i4p473-494.html
   My bibliography  Save this article

The Financial Stakes in Due‐On‐Sale: The Case of California's State‐Chartered Savings and Loans

Author

Listed:
  • Larry Ozanne

Abstract

On August 25, 1978 the California Supreme Court ruled that enforcement of due‐on‐sale clauses unduly restricts the right of homeowners to sell their homes. On June 28, 1982, the U.S. Supreme Court ruled that the Federal Home Loan Bank Board could permit due‐on‐sale enforcement because such enforcement was important to the financial stability of savings and loans. Both courts' decisions, though contrary in their effect on the clause, are based on the economic importance of the clause. Just how important is the clause? This paper calculates how much money the 1978 California decision (Wellenkamp) transferred from affected savings and loans to homebuyers. The yearly transfer by 1981 is estimated at between $58 and $170 million. For the lenders, this amounts to between a tenth and a quarter of total 1981 losses. For affected homebuyers, the savings average 25% of mortgage interest payments. On the basis of these calculations, both courts are correct about the importance of the clause.

Suggested Citation

  • Larry Ozanne, 1984. "The Financial Stakes in Due‐On‐Sale: The Case of California's State‐Chartered Savings and Loans," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 12(4), pages 473-494, December.
    • Handle: RePEc:bla:reesec:v:12:y:1984:i:4:p:473-494
    DOI: 10.1111/1540-6229.00334
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1540-6229.00334
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1540-6229.00334?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reesec:v:12:y:1984:i:4:p:473-494. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/areueea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.