A Tale of Three Markets Revisited

Engel, Kathleen C., McCoy, Patricia A., Texas Law Review

I. Introduction

Susan Wachter's and Elizabeth Renuart's comments highlight two phenomena that are critical to understanding predatory lending: the paucity of legitimate risk-based pricing in the subprime market and the steering of people of color to predatory loans. We agree completely with Dr. Wachter's assessment that information asymmetries have impeded the evolution of a well-functioning home mortgage market.1 Without closure of these information gaps or regulations that compensate for the information gaps, predatory lenders will continue to capture excess rents. We likewise endorse Ms. Renuart's timely and astute observation that predatory lending, among other things, must be …

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Publication information: Article title: A Tale of Three Markets Revisited. Contributors: Engel, Kathleen C. - Author, McCoy, Patricia A. - Author. Journal title: Texas Law Review. Volume: 82. Issue: 2 Publication date: December 2003. Page number: 439. © University of Texas, Austin, School of Law Publications, Inc. Dec 2008. Provided by ProQuest LLC. All Rights Reserved.

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