This paper examines how differences in state foreclosure laws influence the incidence of default in the residential mortgage market. Specifically, we examine how judicial review requirements, lenders' recourse rights (deficiency judgments), and state assistance programs for distressed borrowers...

An important advantage of secured relative to unsecured debt is that it provides better protection against dilution from other creditors of the firm. While covenants may provide unsecured lenders protection from dilution arising from the issuance of additional debt, they are less likely to be...