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Foreclosures: relationship lending in the consumer market and its aftermath

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  • O. Emre Ergungor

Abstract

Relationship lending theory suggests that lenders in close proximity to their borrowers might be the most efficient providers of screening and monitoring services, because the cost of collecting information declines with distance. The author presents evidence that ties bank branch presence to borrower performance in the low-income housing market, which provides support for this theory.

Suggested Citation

  • O. Emre Ergungor, 2006. "Foreclosures: relationship lending in the consumer market and its aftermath," Working Papers (Old Series) 0617, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:0617
    DOI: 10.26509/frbc-wp-200617
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    References listed on IDEAS

    as
    1. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    2. Robert Hauswald & Robert Marquez, 2006. "Competition and Strategic Information Acquisition in Credit Markets," The Review of Financial Studies, Society for Financial Studies, vol. 19(3), pages 967-1000.
    3. Windmeijer, Frank, 1995. "A Note on R2 in the Instrumental Variables Model," MPRA Paper 102511, University Library of Munich, Germany.
    4. Winton Andrew, 1995. "Delegated Monitoring and Bank Structure in a Finite Economy," Journal of Financial Intermediation, Elsevier, vol. 4(2), pages 158-187, April.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Branch banks; Mortgage loans;

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