America’s Mortgage Laws in Historical Perspective
Department of Finance
W.P. Carey School of Business
Arizona State University
aghent@asu.edu
Phone: (480) 965-4689
http://www.public.asu.edu/~aghent/
October 24, 2012
Abstract:
This paper traces the history of mortgage laws in the US. I explore what led states to follow title or lien theory, to adopt a non-judicial foreclosure procedure, to have different redemption periods, and to restrict deficiency judgments. The availability of non-judicial foreclosure without significant restrictions is largely the result of path-dependent quirks in the wording of various proposed statutes and decisions of individual judges. States that experienced more farm foreclosures in the early 1930s are more likely to have tried to ban deficiency judgments. Finally, I find higher foreclosures during the 1930s in non-judicial foreclosure states.
An interesting report based on the economies of the time but it failed to address why, in the beginning, freshly admitted states tried to emulate the original 13.
Logic dictates that they did this in an effort to give their citizens the proper constitutional floor of protection, as it was perceived by the original authors,and promised when they entered the union.