Can regulation de-bias appraisers?

Sumit Agarwal, Brent W. Ambrose, Vincent W. Yao

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


This paper examines the effect of a regulatory action (the Home Valuation Code of Conduct) that was designed to reduce the incidence of inflated collateral valuations. We identify the impact of the regulation using a difference-in-difference identification strategy. Our baseline results confirm that the regulation reduced inflated valuations in refinance transactions by 16% in the large lender sample, compared to small lenders and a placebo sample. The effect is most significant in low-liquidity and low-distress markets, but not in other markets. We find that the regulation had a significant impact on loan to value ratio and interest rate, and it also led to a significant increase in defaults but a decrease in prepayments.

Original languageEnglish (US)
Article number100827
JournalJournal of Financial Intermediation
StatePublished - Oct 2020

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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