1{2 "indexed": {3 "date-parts": [4 [5 2026,6 9,7 298 ]9 ],10 "date-time": "2026-09-29T12:36:18Z",11 "timestamp": 1790685378798,12 "version": "4.1.0"13 },14 "reference-count": 45,15 "publisher": "Oxford University Press (OUP)",16 "license": [17 {18 "start": {19 "date-parts": [20 [21 2019,22 8,23 224 ]25 ],26 "date-time": "2019-08-02T00:00:00Z",27 "timestamp": 156470400000028 },29 "content-version": "am",30 "delay-in-days": 0,31 "URL": "https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model"32 }33 ],34 "content-domain": {35 "domain": [],36 "crossmark-restriction": false37 },38 "abstract": "<jats:title>Abstract</jats:title><jats:p>This article studies how credit markets respond to policy constraints on household leverage. Exploiting a sharp policy-induced discontinuity in the cost of originating certain high-leverage mortgages, we study how the Dodd\u2013Frank \u201cAbility-to-Repay\u201d rule affected the price and availability of credit in the U.S. mortgage market. Our estimates show that the policy had only moderate effects on prices, increasing interest rates on affected loans by 10\u201315 basis points. The effect on quantities, however, was significantly larger; we estimate that the policy eliminated 15% of the affected market completely and reduced leverage for another 20% of remaining borrowers. This reduction in quantities is much greater than would be implied by plausible demand elasticities and indicates that lenders responded to the policy not only by raising prices but also by exiting the regulated portion of the market. Heterogeneity in the quantity response across lenders suggests that agency costs may have been one particularly important market friction contributing to the large overall effect as the fall in lending was substantially larger among lenders relying on third-parties to originate loans. Finally, while the policy succeeded in reducing leverage, our estimates suggest this effect would have only slightly reduced aggregate default rates during the housing crisis.</jats:p>",39 "DOI": "10.1093/restud/rdz040",40 "type": "journal-article",41 "created": {42 "date-parts": [43 [44 2019,45 7,46 3147 ]48 ],49 "date-time": "2019-07-31T03:10:41Z",50 "timestamp": 156454264100051 },52 "source": "Crossref",53 "is-referenced-by-count": 10,54 "title": [55 "Regulating Household Leverage"56 ],57 "prefix": "10.1093",58 "author": [59 {60 "given": "Anthony A",61 "family": "Defusco",62 "sequence": "first",63 "affiliation": [64 {65 "name": "Northwestern University"66 }67 ],68 "role": [69 {70 "vocabulary": "crossref",71 "role": "author"72 }73 ]74 },75 {76 "given": "Stephanie",77 "family": "Johnson",78 "sequence": "additional",79 "affiliation": [80 {81 "name": "Rice University"82 }83 ],84 "role": [85 {86 "vocabulary": "crossref",87 "role": "author"88 }89 ]90 },91 {92 "given": "John",93 "family": "Mondragon",94 "sequence": "additional",95 "affiliation": [96 {97 "name": "Northwestern University"98 }99 ],100 "role": [101 {102 "vocabulary": "crossref",103 "role": "author"104 }105 ]106 }107 ],108 "member": "286",109 "published-online": {110 "date-parts": [111 [112 2019,113 8,114 2115 ]116 ]117 },118 "reference": [119 {120 "key": "2019091012343920000_B1",121 "doi-asserted-by": "crossref",122 "DOI": "10.3386/w18311",123 "article-title": "Policy Intervention in Debt Renegotiation: Evidence from the Home Affordable Modification Program",124 "author": "AGARWAL,",125 "year": "2012"126 },127 {128 "key": "2019091012343920000_B2",129 "doi-asserted-by": "crossref",130 "DOI": "10.3386/w21512",131 "article-title": "Mortgage Refinancing, Consumer Spending, and Competition: Evidence from the Home Affordable Refinancing Program",132 "author": "AGARWAL,",133 "year": "2015"134 },135 {136 "key": "2019091012343920000_B3",137 "doi-asserted-by": "crossref",138 "first-page": "111",139 "DOI": "10.1093/qje/qju037",140 "article-title": "Regulating Consumer Financial Products: Evidence from Credit Cards",141 "volume": "130",142 "author": "AGARWAL,",143 "year": "2015",144 "journal-title": "The Quarterly Journal of Economics"145 },146 {147 "key": "2019091012343920000_B4",148 "article-title": "Re: Docket No. CFPB-2017-0014 Request for Information Regarding Ability-to-Repay/Qualified Mortgage Rule Assessment",149 "author": "AMERICAN BANKERS ASSOCIATION",150 "year": "2017"151 },152 {153 "key": "2019091012343920000_B5",154 "article-title": "Q&A: Non-QM Securitization Market Outlook",155 "author": "ANGEL OAK CAPITAL ADVISORS",156 "year": "2018"157 },158 {159 "key": "2019091012343920000_B6",160 "doi-asserted-by": "crossref",161 "DOI": "10.3386/w24091",162 "article-title": "House Price Beliefs and Mortgage Leverage Choice",163 "author": "BAILEY,",164 "year": "2017"165 },166 {167 "key": "2019091012343920000_B7",168 "doi-asserted-by": "crossref",169 "first-page": "1504",170 "DOI": 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