Date of Award


Document Type

Honors Thesis

Degree Name

Bachelor of Arts

Advisor/Committee Chair

David P. McCaffrey


In today’s American housing market, foreclosure can be seen as an epidemic resulting from the legal mass marketing of risky loan products and systematic overcharging of consumers in susceptible positions. Subprime mortgages are high-cost home loans intended for people with weak or blemished credit histories, and though they are intended to encourage and facilitate homeownership, not only did politicians create a flawed mortgage industry to push for this “American Dream” but it is arguably a manipulative industry that can easily be taken advantage of.1 Thus, current snapshots of the subprime market show that one in every five subprime mortgages made in 2005-2006 will end in foreclosure.2 Many institutions have targeted mortgage lending reform as the most critical step in mending the United States’ economy; that is, confidence may be restored in the housing market by either strengthening existing mortgage lending practices – including correcting business incentives to make “bad loans” – or developing more innovative policies to do so. And while over two million homeowners have already been affected, the consequences have had massive spillover effects including property value reductions, lost jobs, and devastated communities.

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