Professor Oren Bar-Gill’s article “The Law, Economics and Psychology of Subprime Mortgage Contracts,” published in the Cornell Law Review in 2009, has won the American College of Consumer Financial Services Lawyers’ annual writing competition award for best article. With prizes in three categories—articles and reviews, book chapters or books, and student works—the competition is intended to improve understanding of consumer financial services law.

Bar-Gill’s article examines the central design of the subprime mortgage contracts that factored into the ongoing economic crisis, arguing that the contractual design was not welfare-maximizing for many borrowers, that the welfare loss was compounded by broader social costs, and that attempts at regulatory reform of the subprime market should be informed by a better understanding of the market failure that gave rise to the inefficient contracts.

Posted on February 11, 2010