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Journal articles on the topic 'Mortgage loan'
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1
Pavlova, I. YU, and U. S. Smirnova. "Certain Issues of the Practice of Applying the Rules on Mortgages under the Contract." Siberian Law Herald 2 (2021): 42–47. http://dx.doi.org/10.26516/2071-8136.2021.2.42.
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Some aspects of the application of norms in the field of mortgages by virtue of the contract are considered: the interpretation of paragraph 1 of Article 78 of the Federal Law «On Mortgage (Pledge of Real Estate)», the problem of eviction of citizens living with the mortgagor, the legal meaning of the purpose of the loan during foreclosure on property. The article analyzes the possibility of securing the debtor’s non-property obligations with a mortgage, the risks of the mortgagee when issuing a loan (credit) amount. It has been established that regulation of both targeted and non-targeted loans secured by the pledge of housing owned by citizens is of great importance. Thanks to the analysis of the current judicial practice, it was noted that at the moment the courts do not make the decision on the foreclosure of property dependent on the intended purpose of the loan (loan); however, exactly the purpose of the loan is taken into account by the court when deciding on the eviction of the mortgagor and the persons living with him. It has been established that at this stage in the development of civil law relations, the issue of protecting the rights of citizens, including minors, who risk losing their only habitable living quarters, arises.
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de Haan, Leo, and Mauro Mastrogiacomo. "Loan to Value Caps and Government-Backed Mortgage Insurance: Loan-Level Evidence from Dutch Residential Mortgages." De Economist 168, no. 4 (June 17, 2020): 453–73. http://dx.doi.org/10.1007/s10645-020-09367-w.
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Abstract Using loan level data on mortgage loans originated by Dutch banks during 1996 to 2015, we analyse the determinants of the incidence of non-performance. We find that both the originating loan-to-value ratio (OLTV) and the debt-service-to-income ratio are significantly positively associated with the probability of non-performance. The results suggest that mortgages with government-loan-guarantees perform better. Moreover, several mortgage loan and borrower characteristics, such as the (interest-only) loan type and the underwater status of the borrower, increase credit risk. Our model predictions suggest a novel policy implication: in order to avoid acceleration of non-performance probabilities, the OLTV-limit should be set to about 70–80% for uninsured mortgages, and to about 90% for those with mortgage insurance.
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Theunissen, Anton. "Securitization, loan modification and the supply of subprime mortgage credit in the US." Risk Governance and Control: Financial Markets and Institutions 3, no. 3 (2013): 149–62. http://dx.doi.org/10.22495/rgcv3i3c1art6.
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This paper develops a continuous time, contingent claims model of mortgage valuation with strategic behavior to show that mortgages that are securitized are characterized by significantly higher loan to value ratios than mortgages held on the balance sheet of the originator, if securitized mortgages cannot be renegotiated. Insofar as securitization inhibits loan modification, it serves as a credible threat to the borrower that default will provoke foreclosure. This enhances the value of the lender’s claim on the loan collateral, the home, and she is willing to lend more per dollar of collateral value. An important implication of the analysis is that the higher loan to value ratio for the securitized mortgage does not imply that the securitized mortgage is characterized by looser underwriting standards than the mortgage held on balance sheet. Higher loan to value ratios for securitized mortgages do not necessarily constitute evidence that securitization encourages risky lending.
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Ampofo, Justice Agyei, and Isaac Mantey. "DETERMINANTS OF MORTGAGE LOAN REPAYMENT IN GHANA." Finance & Accounting Research Journal 3, no. 4 (December 19, 2021): 75–89. http://dx.doi.org/10.51594/farj.v3i4.266.
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The housing deficit in Ghana is an issue of concern for all. This study sought to analyse the determinants of the repayment of mortgage loans in Ghana. The study used both secondary and primary data. The mixed-method approach was used for the study. The data collection instruments were interviews, focus group discussions and questionnaires. The study revealed that socio-demographic characteristics of respondents, sex distribution of respondents, educational level of respondents, marital status of respondents, occupational status of respondents, household size of respondents, the income of respondents are some of the factors that affect the repayment of mortgage loans in Ghana. The study revealed that borrowers who earned higher income had a better repayment performance as compared to low income earning borrowers. In addition, higher household sizes have lower repayment capacity and lower household sizes have higher repayment capacity. The study recommends that the government of Ghana should institute state bodies responsible for providing liquidity to mortgages and mortgage properties and buying mortgages during periods of rising interest rates is a way of creating a secondary mortgage market for the Ghanaian mortgage industry. Keywords: Determinants, Mortgage, Repayment, Ghana.
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Zhu, Shuzhen, Yutao Chen, and Wenwen Wang. "Risk Assessment of Biological Asset Mortgage Loans of China’s New Agricultural Business Entities." Complexity 2020 (November 25, 2020): 1–12. http://dx.doi.org/10.1155/2020/8865840.
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The large-scale proliferation of China’s new type of agricultural entities has given rise to a higher demand for funds. Farmers have insufficient effective collateral, which makes it difficult for them to obtain sufficient loans. Chinese financial institutions have developed a biological asset mortgage loan business to cope with this situation. China has not considered biological mortgages but has been using real estate and asset mortgage models with strong realizability. This innovative financial business has achieved positive results since it was attempted, but it also faces many risks. It is very important to comprehensively and accurately consider the risk factors of biological asset mortgage loans. Based on 1249 production and operation data samples of new agricultural entities in Zhejiang, Henan, and Shandong provinces, this study constructs an XGBoost model for empirical analysis and compares it with logical regression, support vector machine, and random forest algorithms to obtain the optimal model and feature importance value. According to the characteristic importance value, a biological asset mortgage loan risk assessment system with 4 primary indicators and 20 secondary indicators is established, which can effectively identify the biological asset mortgage loan risk of new agricultural entities.
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Holmes, Cynthia, and Michael LaCour-Little. "International Real Estate Review." International Real Estate Review 10, no. 1 (June 30, 2007): 151–70. http://dx.doi.org/10.53383/100079.
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We combine loan data from distinct sources to compare and contrast multifamily mortgage lending in Canada and the U.S. After a general comparison of the multifamily housing markets in the two countries, we focus on loan pricing and non-price contract terms in the two environments. We find longer loan terms in the U.S. compared to Canada and attribute this to the greater liquidity available from a more established secondary mortgage market. We also find that while nominal rates are higher in Canada, mortgage spreads are actually lower, a result likely due to contract features that raise the cost of default for borrowers and restrict prepayments". In terms of loan performance, we found greater prepayment risk in U.S. mortgages and greater default risk in Canadian mortgages, although findings regarding default are limited by small sample size.
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Naoi, Michio, Piyush Tiwari, Yoko Moriizumi, Norifumi Yukutake, Norman Hutchison, Alla Koblyakova, and Jyoti Rao. "Household mortgage demand: a study of the UK, Australia and Japan." International Journal of Housing Markets and Analysis 12, no. 1 (February 4, 2019): 110–30. http://dx.doi.org/10.1108/ijhma-03-2017-0029.
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PurposeHomeownership has been the main focus of housing policies in most countries. Typical means that households use to achieve homeownership is to take out a loan and supplement this with accumulated wealth for a downpayment. This paper aims to analyze the mortgage demand behavior of households in the UK, Australia and Japan.Design/methodology/approachUsing three panel data sets, HILDA for Australia, KHPS for Japan and USS for the UK, the paper estimates three equations using ordinary least squares: mortgage demand function, housing demand function and initial loan to value ratio function.FindingsThough homeownership is a preferred tenure and the mortgages are “recourse” loans, housing markets in these three countries operate in different mortgage market institutional structures. Results indicate that income elasticity of mortgage demand differ despite income elasticity of housing demand being similar. Different mortgage institutions in countries that pose constraints for borrowers also determine mortgage demand. Other factors such as demography and economic conditions have also played an important role in determining mortgage and housing demand.Originality/valueThe paper is first, to the authors’ knowledge, that explores the role of institutions in mortgage demand in a comparative framework for the UK, Japan and Australia.
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DeFusco, Anthony A., and Andrew Paciorek. "The Interest Rate Elasticity of Mortgage Demand: Evidence from Bunching at the Conforming Loan Limit." American Economic Journal: Economic Policy 9, no. 1 (February 1, 2017): 210–40. http://dx.doi.org/10.1257/pol.20140108.
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This paper provides novel estimates of the interest rate elasticity of mortgage demand by measuring the degree of bunching in response to a discrete jump in interest rates at the conforming loan limit—the maximum loan size eligible for purchase by Fannie Mae and Freddie Mac. The estimates indicate that a 1 percentage point increase in the rate on a 30-year fixed-rate mortgage reduces first mortgage demand by between 2 and 3 percent. One-third of this response is driven by borrowers who take out second mortgages, which implies that total mortgage debt only declines by 1.5 to 2 percent. (JEL D14, G21, R21, R31)
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Snowden, Kenneth A. "Covered Farm Mortgage Bonds in the United States During the Late Nineteenth Century." Journal of Economic History 70, no. 4 (December 2010): 783–812. http://dx.doi.org/10.1017/s0022050710000720.
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Covered mortgage bonds have been used successfully in Europe for two centuries, but failed in the United States when introduced as farm mortgage debentures in the 1880s. Using firm-level data and a sample of loans made by one Kansas mortgage company, I find that debenture programs grew out of established loan brokerage operations and were used to fund mortgages that were difficult to broker because of size, term, or risk characteristics. Debentures broadened access to the interregional mortgage market and facilitated an expansion of western farm mortgage debt before the innovation failed in the mortgage crisis of the 1890s.“[T]he availability of affordable mortgage financing is essential to turning the corner on the current housing crisis …. One option we have looked at extensively is covered bonds, which … have the potential to increase mortgage financing, improve underwriting standards, and strengthen U.S. financial institutions ….”Secretary of Treasury Henry PaulsonJuly 28, 2008
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Ranisavljević, Duško, and Miroljub Hadžić. "Realistic Evaluation of the Ratio: Loan-To-value – The Key to Minimising the Credit Risk." Economic Themes 54, no. 3 (September 1, 2016): 449–68. http://dx.doi.org/10.1515/ethemes-2016-0022.
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AbstractAs a rule, long-term bank loans entail solid security - a mortgage, regardless of their purpose. The mortgaged property has its specific market value during the loan approval period but during the repayment period, the value of the real estate varies. This is the reason why the initially specified indicator of the coverage of loans with the value of the mortgage - the LTV ratio changes, which in turn increases the risk of loan repayment. The aim of this paper is to draw attention to the necessity of establishing adequate initial LTV ratios (together with other important ratios). This would help nullify the risk of any variations in real estate prices, the loan currency risk, the interest rate risk, as well as the risk of an increase in bank's claims because of a long foreclosure process. The paper analyses effects of changes in LTV ratios caused by varying circumstances using the case study method. The comparative method analyses the changing trends of data on the LTV ratios for the already approved loans over a seven-year period by comparing the flow of the loan capital sum with the real value of the mortgage for three types of loans. The conclusion reached is that commercial banks should establish the initial LTV ratio for various long-term loan products and thus prevent its rise. Banks should do this by taking into account all the factors that cause the ratio’s increase, and thus give preference to the reduction of the credit risk and not the attractiveness and accessibility of loan products.
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Lux, Nicole, and Sotiris Tsolacos. "Loan Characteristics as Predictors of Default in Commercial Mortgage Portfolios." International Journal of Economics and Financial Research, no. 71 (February 17, 2021): 1–4. http://dx.doi.org/10.32861/ijefr.71.1.4.
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This paper examines the role of loan characteristics in mortgage default probability for different mortgage lenders in the UK. The accuracy of default prediction is tested with two statistical methods, a probit model and linear discriminant analysis, using a unique dataset of defaulted commercial loan portfolios provided by sixty-six financial institutions. Both models establish that the attributes of the underlying real estate asset and the lender are significant factors in determining default probability for commercial mortgages. In addition to traditional risk factors such as loan-to-value and debt servicing coverage ratio lenders and regulators should consider loan characteristics to assess more accurately probabilities of default.
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Fermus-Bobowiec, Anna. "Municipal Mortgage Loan Institutions in the Kingdom of Poland. A Contribution to the Discussion on the Organisatioal Model of Mortgage Credit in Poland." Roczniki Nauk Prawnych 28, no. 2 ENGLISH ONLINE VERSION (October 28, 2019): 5–18. http://dx.doi.org/10.18290/rnp.2018.28.2-1en.
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The article presents the legal underpinnings of the operation of municipal credit societies in the Kingdom of Poland, which were institutions providing municipal mortgage loans. This is presented using the example of the Lublin Land Credit Society, and the author draws general conclusions about the model of mortgage loan offered by loan societies. At that time, the credit society was the most popular organisational model used with mortgage loans, not only in towns (municipal credit societies) but also in the countryside (land credit societies).
Furthermore, when seeking the origins of mortgage banking, the author presents other institutions granting long-term loans in the Polish territories, apart from credit societies. This analysis, with its legal and historical perspective, is considered by the author to be a contribution to discussion on mortgage loan and the place of contemporary mortgage banking in Poland.
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NAPITUPULU, LUCY MARGARETH. "ANALISIS YURIDIS SUBROGASI DENGAN PENGALIHAN KREDIT YANG TERIKAT HAK TANGGUNGAN PADA PT. BANK RAKYAT INDONESIA (PERSERO) TBK. CABANG KABANJAHE." Ilmu Hukum Prima (IHP) 4, no. 1 (April 30, 2021): 119–39. http://dx.doi.org/10.34012/jihap.v4i1.1635.
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All business sectors or individuals today and in the future cannot be separated from banking sector. In order to balance and harmonize this need, the role of bank is to provide loan fund through loan. Kabanjahe Branch Office of BRI, in providing loans, makes efforts and competes to create innovations to their products as their strategies to get prime consumer debtor candidate including debtors who performs loan takeover. Loan takeover that is bound with mortgage right in Kabanjahe Branch Office of BRI is the provision of new loans to consumer debtor, which aims to pay consumer debtor’s ongoing loans, with land title as mortgage rights of the loan that is bound with mortgage right in the older bank, so that Kabanjahe Branch Office of BRI replaces rights of the older bank. Loan takeover that is bound with mortgage rights in Kabanjahe Branch Office of BRI is related to the provisions of subrogation in the Civil Code.This research employs empirical juridical method which is descriptive. It describes, studies, explains, and analyzes theoretical and practical legal regulations on mechanism and legal consequences for loan takeover that is bound with mortgage right in Kabanjahe Branch Office of BRI, and whether the loan takeover is in line with the provisions of subrogation in the Civil Code.The results of the research explains the mechanism of loan takeover. It is done by submitting an application for loan by candidate consumer debtor to be processed, and then the loan is realized and transferred. The legal consequences for loan takeover is the emergence of a loan agreement between customer debtor and Kabanjahe Branch Office of BRI and the termination of the loan agreement between the customer debtor and the older bank; the elimination of mortgage right for and in the name of the older bank and the emergence of mortgage right for and in the name of Kabanjahe Branch Office of BRI; the termination of the position of older bank as creditor and holder of the mortgage right of customer debtor and mortgage right grantor. The implementation of the loan takeover that is bound with mortgage right in Kabanjahe Branch Office of BRI has been in line with the provision son subrogation, namely Article 1400 of the Civil Code, particularly Article 1400 sub 2 of the Civil Code.It is suggested that the Law further regulate provisions on subrogation that are in line with the banking development today, so that loan takeover that is bound with mortgage right can fully/completely implement the provision on subrogation as well in the future. It is expected that more references discuss about the legal consequences for loan takeover that is bound with mortgage right. It is also expected that subrogation be introduced and implemented again in banking practice and Notary, because it is in line with the provision son subrogation in the Civil Code.
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Ma, Seung Ryul. "Evaluating Borrower's Net Yield in Long-Term Fixed Rate Mortgage Loans in Korea." International Review of Financial Consumers 4, No. 1 Apr 2019 (April 1, 2019): 1–16. http://dx.doi.org/10.36544/irfc.2019.1-1.1.
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The Korean government has tried to change the structure of residential mortgages in Korea from the short-term variable-rate non-amorting loans to the long-term fixed-rate amorting loans since the early 2000’s. This study examines he borrower’s net yield from that new type of loans, which is defined as the difference between the lender’s yield out of the borrower’s repayment and the borrower’s yield from the expected gain on the portion of housing equity funded by cosnumer. The main hypothesis tested is that the borrower’s net yield will be affected by the time of loan origination and the level of mortgage interest rate charged because the future fluctuations of housing values and that of market interest rates are expected to be key determinants. The results confirm the hypothesis in that borrower’s net yields show positive or negative values according to the time of loan start, the level of fixed loan rates, or home regions. The results documented can offer a useful information as to the financial consumers’decision on loan amount and the timing of loan application considering the housing and mortgage market condition, which in turn can provide policy implication to regulating the maximum loan-to-value (LTV) ratio regulations.
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Furfine, Craig H. "Complexity and Loan Performance: Evidence from the Securitization of Commercial Mortgages." Review of Corporate Finance Studies 2, no. 2 (January 17, 2014): 154–87. http://dx.doi.org/10.1093/rcfs/cft008.
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Between 2001 and 2007, the complexity of commercial mortgage-backed securities (CMBS) increased substantially. The median size of commercial mortgage loan pools tripled and the median number of AAA-rated tranches doubled. I examine whether deal complexity is related to loan performance by analyzing a sample of approximately 40,000 commercial mortgage loans from 334 CMBS deals. I find that loan performance is worse for loans in more complex securitizations. However, neither the price of a deal’s securities nor a deal’s risk retention reflected that complexity correlates with lower loan quality. These findings present a challenge for theories of optimal security design.
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Tang, Enlin. "Research on Interest Rate Risk of Housing Mortgage Loan Based on Computer Simulation." Computational Intelligence and Neuroscience 2021 (August 23, 2021): 1–6. http://dx.doi.org/10.1155/2021/6035022.
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In recent years, with the rapid increase of the business volume of housing mortgage loans of commercial banks, the risk of prepayment is increasingly exposed. Prepayment will have a great impact on the duration and convexity of housing mortgage loans of commercial banks and then bring difficulties to the asset liability management of banks. Therefore, empirical research on the changes of duration and convexity of housing mortgage loans caused by prepayment when the market interest rate changes is of great significance for commercial banks to manage interest rate risk exposure. Based on the analysis of the option characteristics of prepayable housing mortgage loan, the CIR model with GARCH(1, 1) is selected to describe the interest rate change path, and the computer simulation method is used to calculate OAS and then calculate the effective duration and effective convexity of housing mortgage loan under different prepayment rates, so as to understand the interest rate risk of housing mortgage loan in the presence of embedded option.
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Zheng, Hongguang, and Zhanbin Zhang. "Analyzing Characteristics and Implications of the Mortgage Default of Agricultural Land Management Rights in Recent China Based on 724 Court Decisions." Land 10, no. 7 (July 12, 2021): 729. http://dx.doi.org/10.3390/land10070729.
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The transfer of rural land contractual management rights belongs to the recessive transition of land use. The mortgage of rural land management rights is a way of rural land circulation, and has an important impact on the transformation of land use. Rural land management rights mortgage loans can enable farmers to obtain more credit funds, which is conducive to agricultural development and Rural Revitalization. However, with the development of rural land mortgage financing, the associated risk has become increasingly prominent. The most typical risk is the default risk of farmers’ mortgage loans. Based on court decisions regarding rural land mortgage default during 2014–2020, this paper analyzes the characteristics of farmers’ default in different periods and locations. The empirical results reveal that the time and space of rural land mortgage default cases are widely distributed in China, especially in Heilongjiang Province. In the default judgement, the loan amount of CNY 50,000 to CNY 100,000 and the loan periods of 1 year accounted for the highest proportion. When making mortgage loan policies for rural land management rights, financial institutions should give farmers the most preferential treatment regarding the amount, term and interest rate of loans. Farmers’ social security should be improved, and agricultural insurance should be strengthened. Meanwhile, the credit review of small and short-term loan farmers should be heightened.
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Kuzmina, Elena, and Andrei Ianin. "Modelling the profitability of reverse mortgage loans with life-long annuity payments." E3S Web of Conferences 203 (2020): 05020. http://dx.doi.org/10.1051/e3sconf/202020305020.
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The article deals with the economic mechanism of reverse mortgage as a loan product aimed at raising the welfare of senior citizens who own real estate, for organic farming and soil management. The article discusses the financial and historical aspects of the implementation of the reverse mortgage instrument, as well as defines a potential of implementation of this instrument in Russia. Having identified the potential, the authors also mentioned the factors that could prevent Russian banks from adopting this mechanism. The article addresses one specific factor – absence of adequate instruments to predict and evaluate financial performance of reverse mortgage instruments. Consequently, the aim of the current paper is to create a mathematical model of reverse mortgage loan; specifically, current paper focuses on reverse mortgage loan with life-long annuity payments. In order to derive such model, the authors adopted a perspective, according to which loans are perceived as specific products present on an open market. As a result, we have obtained a model that allows lenders to calculate expected gains from reverse mortgage loans with respect to unknown loan span and varying demand, thus diminishing the uncertainty about reverse mortgage properties and making this financial product more attractive and for agricultural planning and economic, agricultural logistics and transport, et al.
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Zahirovic-Herbert, Velma, Karen M. Gibler, and Swarn Chatterjee. "Financial literacy, risky mortgages, and delinquency in the US during the financial crisis." International Journal of Housing Markets and Analysis 9, no. 2 (June 6, 2016): 164–89. http://dx.doi.org/10.1108/ijhma-12-2014-0060.
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Purpose The purpose of this paper is to evaluate whether low financial literacy is associated with the use of risky mortgages and delinquency. Design/methodology/approach A probit analysis is used to analyze the results of a survey of US homeowners. Findings It was found that borrowers with low financial literacy are more likely to have a risky mortgage and be delinquent in their mortgage payments. Originality/value The results indicate that many risky loan borrowers may be unable to evaluate the risks inherent in the mortgage, which contributes to high delinquency rates. These results suggest the need for education and caution in the use of risky mortgages.
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Van Drunen, Leonard D., and John J. McConnell. "Valuing mortgage loan servicing." Journal of Real Estate Finance and Economics 1, no. 1 (March 1988): 5–22. http://dx.doi.org/10.1007/bf00207900.
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Mayer, Christopher, Karen Pence, and Shane M. Sherlund. "The Rise in Mortgage Defaults." Journal of Economic Perspectives 23, no. 1 (January 1, 2009): 27–50. http://dx.doi.org/10.1257/jep.23.1.27.
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The first hints of trouble in the mortgage market surfaced in mid-2005, and conditions subsequently began to deteriorate rapidly. Mortgage defaults and delinquencies are particularly concentrated among borrowers whose mortgages are classified as “subprime” or “near-prime.” The main factors underlying the rise in mortgage defaults appear to be declines in house prices and deteriorated underwriting standards, in particular an increase in loan-to-value ratios and in the share of mortgages with little or no documentation of income. Contrary to popular perception, the growth in unconventional mortgages products, such as those with prepayment penalties, interest-only periods, and teaser interest rates, does not appear to be a significant factor in defaults through mid-2008 because borrowers who had problems with these products could refinance into different mortgages. However, as markets realized the extent of the poor underwriting, underwriting standards tightened and borrowers began to face difficulties refinancing; this dynamic suggests that these unconventional products could pose problems going forward.
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Svobodová, Libuše, and Martina Hedvičáková. "Mortgage Loans and Impacts of the Global Pandemic COVID-19 in the Globalized Society." SHS Web of Conferences 92 (2021): 01047. http://dx.doi.org/10.1051/shsconf/20219201047.
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Research background: The paper is focused on the financial product, esp. on mortgage loans that are often used products in the field of long-term financing in the Czech Republic. These products provide commercial banks and other financial institutions on the Czech globalized financial market. Purpose of the article: The aim of the paper is to analyze the situation on the globalized financial market focused on the mortgage loans and loans from building societies in view of the global Covid-19 pandemic. Methods: Firstly a theoretical background with a review of the literature is provided, then research methodology is described, the key part brings results of development of mortgage loans, development of interest rates and the analysis of the current situation on the mortgage loan market with estimation of future development. The last part is focused on the comparison of selected mortgage loans provided by five financial institution. The article is based on primary and secondary sources. A detailed research together with the analysis and critical assessment of accessible materials will enable to identify the main objectives in the field of study. Findings & Value added: Interest rates on mortgage loans have on the Czech market downward trend in the last years. The best conditions scored in 2019 loan from building society Modrá pyramida. The overall situation in 2020 cause lower interest rates in the mortgage loans. Lower annual percentage rate of charge and smaller monthly mortgage loan repayment and the total overpayment also correspond.
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He, Jia, and Ming Liu. "International Real Estate Review." International Real Estate Review 1, no. 1 (June 30, 1998): 64–80. http://dx.doi.org/10.53383/100004.
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A study on the prepayment behavior of Hong Kong mortgage loans is conducted. With all of the loans as adjustable-rate mortgages (ARMs), we find that 1) Prepayment speeds up and then slows down as the mortgage seasons; 2) Prepayment speeds up as the rate markup decreases; 3) Prepayment speeds up as the interest rate increases; 4) Prepayment speeds up when the profitability ratio of the banks ( the prime-HIBOR spread) is higher; 5) Prepayment speeds up as the price of the property market falls; 6) Prepayment speed is faster for loans with a lower loan-to-value ratio; 7) Prepayment exhibits a seasonal pattern: people tend to prepay in the summer.
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Krainer, John, and Elizabeth Laderman. "Mortgage Loan Securitization and Relative Loan Performance." Journal of Financial Services Research 45, no. 1 (February 21, 2013): 39–66. http://dx.doi.org/10.1007/s10693-013-0161-7.
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Hladkykh, D. M. "The Main Problems of Mortgage Lending and Directions of Its Activation in Ukraine." Business Inform 1, no. 528 (2022): 339–44. http://dx.doi.org/10.32983/2222-4459-2022-1-339-344.
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Stagnation of the loan market of Ukraine actualizes issues related to the need to intensify mortgage lending. The key problems that stand in the way of actualization of mortgage lending in Ukraine are identified as follows: preservation of low level of welfare of the population; numerous and high-profile bankruptcies of participants in the primary housing market; poor quality of the previously formed loan portfolio of individuals; actual prohibition for banks to provide loans to individuals in foreign currency; formation in Ukraine of a kind of «resistance movement» against the return of mortgage loans; presence of a moratorium on the recovery of property on foreign currency loans; a complex of problems related to the legal aspects of the provision and repayment of mortgage loans; low level of institutional development of the mortgage market; presence of a number of objective difficulties and subjective factors in the implementation of the government program «Affordable Mortgage 7%». An analysis of the results of the government program «Affordable Mortgage 7%» for 2021 suggests that its key task is fulfilled only by 23%. To intensify mortgage lending in Ukraine, it is necessary: an increase in the availability of lending to individuals for the purchase of housing within the framework of the government program «Affordable Mortgage 7%»; development of additional government mortgage lending programs focused on the purchase of housing in the primary market; ensuring legislative support for judicial reform; further reduction of the share of problem loans in the loan portfolio; providing legislative support for the creation of a second level of the mortgage market, which should include the issuance and circulation of mortgage bonds, which can also be used as a tool for investing pension savings
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Ozhegov, Evgeniy M. "Heterogeneous preferences of Russian residential mortgage borrowers." Journal of European Real Estate Research 10, no. 1 (May 2, 2017): 35–56. http://dx.doi.org/10.1108/jerer-02-2016-0009.
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Purpose This paper aims to examine the heterogeneity of preferences of mortgage borrowers of Russian state-owned suppliers of residential housing mortgages. Design/methodology/approach Analysis takes into account the underwriting process and the choice of contract terms of all loans originated from 2008 to 2012. The data set contains demographic and financial characteristics for all applications, loan terms and the performance information for all issued loans by one regional bank which operates government mortgage programs. The paper uses a multistep semiparametric approach to estimate the determinants of bank and borrower choice controlling for possible heterogeneity of preferences, sample selection and endogeneity of contract terms. Findings The study found that the demand of low-income households who are unable to afford to improve the housing conditions by other instruments than government mortgage is less elastic according to the change both in interest rate and maturity compared with higher-income households. Social implications Given lower elasticities of the demand, the low-income group of borrowers has higher potential cost of loan and is usually rejected by commercial banks. The presence of the Agency of Housing Mortgage Lending special programs with subsidized interest rate for special constrained categories (young families, teachers, researchers etc.) widens the access for housing conditions’ improvements as a part of housing affordability government program. Originality/value The main contribution to the literature is modeling choice of contract terms as interdependent by the structural system of simultaneous equations with heterogeneous marginal effects.
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Jiang, Shan, and Chen L. Miller. "International Real Estate Review." International Real Estate Review 22, no. 2 (June 30, 2019): 169–96. http://dx.doi.org/10.53383/100279.
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Reverse mortgages generally have open maturity dates. The variability of the exact termination time of a mortgage is one of the most important risks faced by the lenders and mortgage insurers. This paper analyzes the termination experience of reverse mortgages in the United States (US). We find that reverse mortgages can be terminated by three distinct events: refinancing, mortality and mobility. Using the Federal Housing Administration (FHA) insured Home Equity Conversion Mortgage (HECM) loan data, we estimate the probability of the termination through individual events. The results show that refinance termination and other termination events are driven by different factors. Refinances are mainly driven by macroeconomic conditions, such as the appreciation of the house value and decline in interest rate, and usually done in the beginning years of the loan origination. Mortality terminations follow closely the US mortality tables, which are governed by age and gender. Mobility termination shares a similar pattern with mortality termination, especially in the later years of the loan life. Meanwhile, the initial cash drawdown pattern has significant but different impacts on each type of termination. By separating refinance termination from the two other types of terminations, we show that refinance termination slows down when the interest rate starts to rise. Without separating refinance termination, HECM investors could over-project the number of future HECM terminations in a rising interest rate scenario and result in loss of funds.
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Islami, Vina, and Vina Islami. "Analisis Pemberian Kredit Pemilikan Rumah (KPR) Dalam Rangka Mengurangi Non Performing Loan (Studi Kasus PT. Bank Tabungan Negara Tbk. Cabang Bogor)." Moneter - Jurnal Akuntansi dan Keuangan 6, no. 1 (March 29, 2019): 1–6. http://dx.doi.org/10.31294/moneter.v6i1.4480.
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AbstractThe purpose of this study to determine: (1) on the system mortgage (mortgage) PT. Bank Bank Tabungan Negara Tbk. Bogor Branch, (2) analyze the effectiveness of the system of mortgage (mortgage) in order to reduce non-performing loans. This type of research is a descriptive study. Studies using primary data sources and secondary data sources, with the data from interviews with employees. Data collection techniques using observation, interviews, and documentation. The results of the research showed that the system of credit is good enough to see the results of the NPL, but still lack a document - a document that is used to clarify the penginformasian system of mortgage (mortgage). And there is a discrepancy of employees in the implementation of tasks and responsibilities. Keyword : System, Housing Loan, Non-performing loan, the Internal Control
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Sadhwani, Apaar, Kay Giesecke, and Justin Sirignano. "Deep Learning for Mortgage Risk*." Journal of Financial Econometrics 19, no. 2 (July 28, 2020): 313–68. http://dx.doi.org/10.1093/jjfinec/nbaa025.
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Abstract We examine the behavior of mortgage borrowers over several economic cycles using an unprecedented dataset of origination and monthly performance records for over 120 million mortgages originated across the United States between 1995 and 2014. Our deep learning model of multi-period mortgage delinquency, foreclosure, and prepayment risk uncovers the highly nonlinear influence on borrower behavior of an exceptionally broad range of loan-specific and macroeconomic variables down to the zip-code level. In particular, most variables strongly interact. Prepayments involve the greatest nonlinear effects among all events. We demonstrate the significant implications of the nonlinearities for risk management, investment management, and mortgage-backed securities.
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Sokolova, Ekaterina Vladimirovna, Tatyana Vladimirovna Kotova, and Elena Vladimirovna Chernikina. "Insurance innovation with mortgage loan." Vestnik of Astrakhan State Technical University. Series: Economics 2020, no. 1 (March 31, 2020): 139–48. http://dx.doi.org/10.24143/2073-5537-2020-1-139-148.
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The article highlights the problem of digital transformation of the insurance sector, which can facilitate the effective interaction of all participants, increase information transparency and improve the quality of analytical data, optimize the business processes of insurers, and involve a wider range of insurance services in the online environment. To simplify the work with customer data in the processes of automated data collection, analysis and storage, it is necessary to create
a single database. Such a base can be an insurance history bureau. The development strategy of the insurance industry of the Russian Federation for 2019-2021 provides for the creation and use of insurance histories for various types of insurance by analogy with credit histories. Given that in recent years, along with traditional types of lending, mortgage lending has developed, it is proposed to create a mortgage insurance history bureau. Based on the data on issued and prematurely repaid mortgage loans for 2012-2018, the volumes of this information bureau were determined and a forecast was made for 2019-2023 on the number of existing mortgage loans. A business model for the creation and functioning of a mortgage insurance history bureau is proposed, and a cost-effectiveness calculation is made, confirming the feasibility of this proposal. The process of creating and operating a mortgage insurance history bureau is illustrated, which includes two stages:
a preparatory stage for development of a regulatory document of the Central Bank establishing an access procedure and a list of information provided by insurers, amendments and additions to the relevant federal law, software development and definition of a bureau administrator insurance histories; an operation stage for the transfer of the client's dossier with the main parameters of the loan to the credit history bureau after acquiring a mortgage, transfer of the insurance company information about the concluded insurance contract for insurance bureau, storing information during the term of the loan, and five years after his retirement.
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Televantos, Andreas, and Lorenzo Maniscalco. "PROPRIETARY ESTOPPEL AND VENDOR PURCHASER CONSTRUCTIVE TRUSTS." Cambridge Law Journal 74, no. 1 (March 2015): 27–30. http://dx.doi.org/10.1017/s0008197315000185.
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THE recent Supreme Court decision in Scott v Southern Pacific Mortgages [2014] UKSC 52; [2014] H.L.R. 48 considered whether a promise made by the buyer of a piece of land, before completion, could give rise to a proprietary estoppel claim. Obiter, the court also considered the width and applicability of the rule in Abbey National B.S. v Cann [1991] A.C. 56, which has traditionally been seen to provide that completion and the creation of a mortgage charge are to be considered as one transaction in cases of acquisition mortgages where the purchaser could not have purchased the property without the mortgage loan.
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Жукова, О. В. "Compulsory insurance within the framework of the Bank of Russia's Mortgage Regulation Concept." Voprosy regionalnoj ekonomiki, no. 4(49) (December 17, 2021): 203–10. http://dx.doi.org/10.21499/2078-4023-49-4-203-210.
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Банком России, во исполнение поручения Президента РФ от 02.04.2020 № Пр-612 о принятии мер по снижению полной стоимости ипотечных жилищных кредитов, одной из составляющих которой являются расходы на страхование, разработана «Концепция регулирования ипотечного страхования». Суть «Концепции» заключается в том, что, после внесения изменений в федеральный закон, страхователем будет выступать не заёмщик-залогодатель, а банк-кредитор выгодопреобретатель или ипотечный агент. Заёмщик должен будет ежемесячно погашать дополнительно 1,0% от суммы кредита в порядке компенсации расходов банка на страхование The Bank of Russia, pursuant to the instruction of the President of the Russian Federation No. Pr-612 dated 02.04.2020 on taking measures to reduce the full cost of mortgage housing loans, one of the components of which is insurance costs, has developed a «Concept for regulating mortgage insurance», which has been discussed at the level of the professional community, and is currently in the Government of the Russian Federation. The «concept» concerns insurance accompanying the pledge of immovable property arising on the basis of the federal law (mortgage by virtue of the Law) dated 16.07.1998 No. 102-FZ «On Mortgage (pledge of real estate)» and by virtue of the mortgage agreement, as well as personal life and health insurance of the borrower, the essence of which is that, after amendments to the federal law, the policyholder will not be the borrower-mortgagor, but the lender-beneficiary bank or mortgage agent. This is another step towards housing affordability, as the amount of the first lump-sum payment when applying for a mortgage loan and subsequent annual deductions decreases, since the borrower will have to pay insurance premiums in installments for the entire period of the mortgage insurance contract as a percentage, depending on the amount of the mortgage loan.
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Hidayat, Alfi, Sukanda Husin, and Ulfanora Ulfanora. "Legal Protection for the Creditor as the Mortgage Holder for Granting Loan Using Collateral Land and Building Against Bad-Loan Debtor." International Journal of Multicultural and Multireligious Understanding 6, no. 3 (July 21, 2019): 766. http://dx.doi.org/10.18415/ijmmu.v6i3.902.
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The writing of this article is based on a research that aims to analyze and identify the application of prudential banking principles in loan agreement by the bank as creditor for granting loans using collateral land and building as well as to analyze and describe legal protection for creditor as the mortgage holder for granting loan using collateral land and building against bad-loan debtor. The method used is normative legal research using statute and conceptual approaches. Based on the results of the study, mortgage certificate has a permanent, executorial and legal force. It has an executive force that is equivalent to a court decision that has permanent legal force and applies as a substitute for grosse acte hypotheek as long as it concerns land rights. To secure the loan granted to the debtor, the mortgage certificate holder, especially the Bank, has received legal protection in the form of a droit de preference (having precedence rights over other creditors), droit de suite, the ease of auction. In this case, the mortgage object is protected from bankruptcy and it cannot be divided into mortgage objects.
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NOVOSELOV, I. A. "RUSSIAN MORTGAGE MARKET AND REGISTERS OF MORTGAGE COLLATERAL OF MBS COVERED BY DOM.RF MORTGAGE AGENCY." EKONOMIKA I UPRAVLENIE: PROBLEMY, RESHENIYA 1, no. 2 (2021): 49–57. http://dx.doi.org/10.36871/ek.up.p.r.2021.02.01.006.
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The article examines the main trends in the development of the Russian mortgage market and the market of mortgage-backed securities (MBS) associated with government incentive measures. We consider the importance of the registers of mortgage collateral of MBS for the assessment of various risks arising when working with these securities. We analyze the quantitative aspect of mortgage loans in collateral pools for issues covered by the guarantee of the mortgage agency DOM.RF. The analysis of pools includes the aspects of time to maturity, yield, difficultness of the collateral loans and the changes in the Loan/Value ratio. We propose the directions for the development of models for predicting the prepayment levels for mortgage collateral pools.
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Ovanesyan, Sergey, and Irina Starostacheva. "Mathematical Models for Calculation of the Parameters of the Bank and the Borrower in the Mortgage Lending." Bulletin of Baikal State University 31, no. 4 (December 28, 2021): 423–30. http://dx.doi.org/10.17150/2500-2759.2021.31(4).423-430.
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The article covers the consideration of the issues of analysis and development of mathematical models to improve the efficiency of the mortgage lending system. The relevance of the study is due to the fact that the current mechanisms of mortgage lending in Russia do not correspond to global trends: by interest rates level; in terms of the volume of loans issued and other conditions. However, it is one of the main tools that allows to improve the population’s living conditions and, as a result, to release the socio-economic tension caused by this factor, as well as to attract additional input in the investment and construction sector, which in modern conditions is one of the most important problems. As a result of the research carried out, the article offers a mathematical model for calculating the parameters of the bank and the borrower, in order to form the most acceptable conditions for the loan. In the mathematical model, such parameters of the borrower and the lender as the price of the apartment, the percentage of the down payment from its price, the mortgage loan rate, the total debt and the loan term, as well as the share of the borrower's income allocated to monthly payments are interconnected. This model will allow the bank to determine the most suitable loan conditions regarding the payment amount, term, and available credit limit, and the borrower to calculate the parameters of the loan in order to make an informed decision on attracting it. All this, in the end, will allow banks to reduce the level of risk on issued mortgage loans, and the borrower — confidence in the ability to pay off the mortgage loan.
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Francke, M. K., and F. P. W. Schilder. "Losses on Dutch residential mortgage insurances." Journal of European Real Estate Research 7, no. 3 (October 28, 2014): 307–26. http://dx.doi.org/10.1108/jerer-01-2014-0008.
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Purpose – This paper aims to study the data on losses on mortgage insurance in the Dutch housing market to find the key drivers of the probability of loss. In 2013, 25 per cent of all Dutch homeowners were “under water”: selling the property will not cover the outstanding mortgage debt. The double-trigger theory predicts that being under water is a necessary but not sufficient condition to predict mortgage default. A loss for the mortgage insurer is the result of a default where the proceedings of sale and the accumulated savings for postponed repayment of the principal associated to the loan are not sufficient to repay the loan. Design/methodology/approach – For this study, the authors use a data set on losses on mortgage insurance at a national aggregate level covering the period from 1976 to 2012. They apply a discrete time hazard model with calendar time- and duration-varying covariates to analyze the relationship between year of issue of the insurance, duration, equity, unfortunate events like unemployment and divorce and affordability measures to identify the main drivers of the probability of loss. Findings – Although the number of losses increases over time, the number of losses relative to the active insurance is still low, despite the fact that the Dutch housing market is the world’s most strongly leveraged housing market. On average, the peak in loss probability lies around a duration of four years. The average loss probability is virtually zero for durations larger than 10 years. Mortgages initiated just prior to the beginning of the financial crisis have an increased loss probability. The most important drivers of the loss probability are home equity, unemployment and divorce. Affordability measures are less important. Research limitations/implications – Mortgage insurance is available for the lower end of the market only and is intended to decrease the impact of risk selection by banks. The analysis is based on aggregate data; no information on individual households, like initial loan-to-value and price-to-income ratios; current home equity; and unfortunate events, like unemployment and divorce, is available. The research uses averages of these variables per calendar year and/or duration. Information on repayments of insured mortgages is missing. Originality/value – This paper is the first to describe the main drivers of losses on insured mortgages in The Netherlands by using loss data covering two housing market crises, one in the early 1980s and the current crisis that started in 2008. Much has changed between the two crises. For instance, prices have risen steeply as has household indebtedness. Furthermore, alternative mortgage products have increased in popularity. Focusing a study on the drivers of mortgage losses exclusively on the current crisis could therefore be biased, given the time-specific circumstances on the housing market.
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LAI, ROSE NENG, SEOW ENG ONG, and TIEN FOO SING. "VALUES OF MORTGAGES WITH TOP-UP PAYMENT OPTIONS." International Journal of Theoretical and Applied Finance 09, no. 05 (August 2006): 801–24. http://dx.doi.org/10.1142/s0219024906003779.
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The right of lenders to request for top-ups of negative equity when the property value falls below the loan outstanding is a little known, yet widely adopted provision in mortgage documents in many Asian markets. We analyze the effect of the top-up option by appealing to a contingent claim framework. Specifically, we model the top-up option as a synthetic option comprising a long put to request for a top-up, a short put that cancels out the first option in the event of a default, and a binary put option once triggered will yield a value equivalent to the difference between the mortgage outstanding and the property value. The results of comparative analyses show that the lender's right to request for top-ups is valuable when the negative mortgage equity increases, especially in a market where price is highly volatile. The top-up clause fundamentally affects the mortgage values for both the borrower and the lender. We show that lender's inaction by not calling for top-ups when negative mortgage equity occurs is suboptimal. On the other hand, the lenders' exercise of the in-the-money top-up options may lead to early default by the mortgagor. This is one of the reasons why lenders exercise this option only very sparingly in practice. This mortgage design has economic value to the lenders, it is, however, not optimal in time of volatile market. The policy implication of the findings is that the sub-optimal top-up feature should be removed from the mortgage contract, and it will not severely jeopardize the lender's ability to enforce payments in the mortgages.
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Shamanina, E. I., S. A. Larina, and S. A. Tadevosyan. "Technologies of virtual reality and perspectives of their application in mortgage lending." E-Management 5, no. 1 (May 1, 2022): 59–68. http://dx.doi.org/10.26425/2658-3445-2022-5-1-59-68.
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The article discusses issues related to the development trends of the Russian mortgage lending market, reveals the essence and substantiates the relevance of the introduction of virtual technologies in the process of providing mortgage loans. The main purpose of the study is to analyze current trends in the Russian mortgage lending market, identify existing problems in the process of providing mortgage loans, and develop proposals for further development and improvement of this type of lending. Particular attention during the study was paid to the peculiarities of the use of virtual technologies in the banking business. The implementation of the research goal is due to the solution of the following tasks: the current state and current trends in the Russian mortgage lending market are analyzed; shortcomings of client banking services in the organization of mortgage lending are indicated; analyzed the features of the use of virtual technologies in mortgage lending and the practice of individual Russian banks using virtual reality technologies when applying for a mortgage; the key business indicators of banks that have implemented virtual technologies are given, and the impact of the increase in the share of mortgage lending on the efficiency of their activities is analyzed. To accomplish these tasks in the course of the study, methods of scientific knowledge were used: logical, analytical, the method of comparative analysis, statistical methods of information processing. As the study showed, at present, mortgages are a key driver of growth in retail bank lending, being a reliable, high-quality and profitable asset in the loan portfolios of Russian banks, and the mortgage lending market itself is promising, dynamic, but still not sufficiently technologically advanced. The use of virtual technologies by banks will improve the quality of customer service, will contribute to the growth of mortgage lending and the further development of technological innovations in the banking sector.
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M. Barrutia, Jose, and María Paz Espinosa. "Consumer expertise matters in price negotiation." European Journal of Marketing 48, no. 11/12 (November 4, 2014): 1962–85. http://dx.doi.org/10.1108/ejm-04-2013-0208.
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Purpose – The main purpose of this paper is to study the effect of consumer expertise on mortgage loan prices. We argue that consumer expertise should affect price due to two reasons: (1) loan mortgage prices in non-price-regulated settings are usually the result of a bank-customer negotiation process; and (2) a mortgage loan is a complex product. Design/methodology/approach – Data on mortgage loan prices were used for a sample of 1,055 households for 2005 (Bank of Spain Survey of Household Finances, EFF-2005). Findings – The regression results indicate that consumer expertise-related metrics are highly significant as predictors of mortgage loan prices. Findings also indicate that cost-related variables and a measure of risk with low discrimination power (i.e. having a permanent employment contract, which accounts for 70 per cent of contracts in Spain) affect price. Surprisingly, more sophisticated measures of credit risk do not have such a significant impact on mortgage prices. Research limitations/implications – Empirical results refer to the credit conditions prior to the financial crisis and could shed some light on the factors that led to it. Practical implications – Findings seem to indicate that, in the period under study, bank managers prioritized capturing new business in the short-term against normative prescriptions, which suggest that price should be credit-risk adjusted (financial literature) and long-term consumer potential adjusted (marketing literature). The post-2008 difficult economic situation of Spanish banks (linked to an excessive portfolio of mortgage loans granted at very low prices) shows that these strategies were wrong. Originality/value – An uncommon perspective was adopted. The importance of consumer expertise-related variables on price has been underemphasized by prior research. The effect of consumer expertise is assessed by using a large and comprehensive database.
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Sá, Nadiejda Deane, Ana Carolina Zoghbi, and Rafael Terra de Menezes. "Impacts of loan-to-value ceilings in the Brazilian mortgage loans." Economia Aplicada 24, no. 3 (September 1, 2020): 319–42. http://dx.doi.org/10.11606/1980-5330/ea153614.
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This study aims to assess the impact of loan-to-value ceiling applied by Resolution BCB No. 4,271 on the mortgage market in September 2013. Based on public aggregated data, we assessed the effect of the regulatory change on the loan-to-value and on quality of the portfolio using impact evaluation techniques that aim to estimate true causal effects. Results suggest the intervention did not reduce total mortgage loans. Interrupted time series and differences-in-differences estimates show statistically significant effects on the quality of the portfolio measured by the proportion of poorly rated credits.
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Yu, Li Hong, Qiang Gao Lan, and Chen Wei Li. "Empirical Analysis on Farmers' Mortgage Willingness to the Land Management Right and its Influencing Factors." Applied Mechanics and Materials 380-384 (August 2013): 4552–56. http://dx.doi.org/10.4028/www.scientific.net/amm.380-384.4552.
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Rural land mortgage loan is an important part of rural financial products and service modes innovation. As the main demand party of rural finance, farmers mortgage willingness is significant to the development and spread of rural land mortgage loan business. This paper, based on the survey data of 140 farmers in Liaoning Province in China, analyzes the mortgage willingness to the land management right and its influencing factors by using the Logit mode. The research results show that farmers mortgage willingness to the land management right is influenced by their age, working experience, the total area of their land, land transferring willingness, income source and supportive policy of the government. Based on the research, this paper also puts forward suggestions on quicken the development of land management right mortgage loan business.
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Dinç, Yusuf. "Comparative empirical analysis on the effect of mortgage loan on capital adequacy ratio." Journal of Emerging Economies and Islamic Research 5, no. 3 (September 30, 2017): 6. http://dx.doi.org/10.24191/jeeir.v5i3.8827.
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Capital adequacy ratio is the main indicator for banks to proceed with their operations. Standards for the calculation of the ratio are based on Basel Accord. Key factor for the calculation is credit risk. Credit risk is a function of credit and collateral type. In this case, mortgage has lower risk weight based on its collateral structure on credit risk. This research evaluates the effects of mortgages on capital adequacy ratio to understand the effects of collateral based credits. The findings show positive results between capital adequacy ratio and mortgages of participation banks. However, mortgages have negative impact on capital adequacy ratio of conventional banks. Participation and conventional banks of Turkey are compared on linear regression to analyse the effects of mortgages on capital adequacy ratio. Results are important for further research and professionals.
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Kim, Jiseob. "HOW LOAN MODIFICATIONS INFLUENCE THE PREVALENCE OF MORTGAGE DEFAULTS." Macroeconomic Dynamics 21, no. 1 (June 20, 2016): 55–105. http://dx.doi.org/10.1017/s1365100515000395.
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How much can government-driven mortgage modification programs reduce the mortgage default rate? I compare an economy without a modification option to one with easy modifications, and evaluate the impact of these loan modifications on the foreclosure rate. Through loan modification, mortgage servicers can mitigate their losses and households can improve their financial positions without having to walk away from their homes. When modifying loan contracts is prohibitively costly, the default rate increases 1.5 percentage points in response to a 2007-style unexpected drop in housing prices of 30%. I calibrate the cost of modification after the financial crisis to match the Home Affordable Modification Program (HAMP) modification rate of 0.68%. My quantitative exercises show that current government efforts to promote mortgage modifications reduce the mortgage default rate by 0.63 percentage points.
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Josipović, Tatjana. "Consumer Protection in EU Residential Mortgage Markets: Common EU Rules on Mortgage Credit in the Mortgage Credit Directive." Cambridge Yearbook of European Legal Studies 16 (2014): 223–53. http://dx.doi.org/10.1017/s1528887000002603.
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AbstractFor many years now, there has been an attempt in the European Union to create a common legal framework for mortgage credit contracts and cross-border activities in the mortgage financial sector. One of the greatest challenges has been the establishment of a corresponding level of consumer protection in EU residential mortgage markets. This issue has become particularly important at the time of financial crisis. Consumers are increasingly exposed to the risk of losing their homes because of failing to fulfil, in due time, their obligations arising from mortgage loans, and thus losing confidence in the EU financial sector. Therefore, the European Union has intensified its efforts to improve consumers’ ability to inform themselves of the potential risks when entering into mortgage loans and mortgaging their real property. On 4 February 2014 the EU adopted the new rules on mortgage credits in the Mortgage Credit Directive. The main objective of the Directive is to increase the protection of consumers in EU mortgage markets from the risks of defaults and foreclosures. A higher level of protection must be ensured by consumers’ increased information capacity related to mortgage credits, as well as by developing a responsible mortgage lending practice across the EU. The Mortgage Credit Directive is also aimed at contributing to the gradual establishment of a single internal market for mortgage credits. In this chapter, the author analyses previous and current attempts by the EU to establish a uniform market of mortgage loans, and assesses the possible impact of the Mortgage Credit Directive on the protection of consumers in the market of mortgage credits and on the development of cross-border activities in the mortgage financial sector. Special emphasis is placed on the possible impact of the new EU rules on mortgages on national protection measures aimed at consumer protection at the time of financial crisis. The transposition of the Mortgage Credit Directive will undoubtedly contribute to a higher level of consumer protection when consumers enter into home loan contracts. However, the question arises whether, because of different levels of harmonisation of some rules laid down in the Directive, its implementation will actually contribute to an increase in cross-border home loans. The possibility for Member States to opt for increased consumer protection in some aspects of credit agreements when implementing the Directive, or the existence of different options for the exercise of individual rights that they may use cannot bring about an integration of mortgage credit markets.
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Chapman, Bruce, and Lorraine Dearden. "Conceptual and Empirical Issues for Alternative Student Loan Designs: The Significance of Loan Repayment Burdens for the United States." ANNALS of the American Academy of Political and Social Science 671, no. 1 (April 27, 2017): 249–68. http://dx.doi.org/10.1177/0002716217703969.
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In this article, we compare the two main types of student loans used to finance postsecondary education: mortgage-type loans, which are repaid over a set period of time and mainly used in the United States; and income-contingent loans, which are repaid depending on students’ future income and used in Australia and England. We argue that the major concern with mortgage-type loans is the repayment burden that falls on students. Repayment burden—the proportion of a debtor’s income required to repay loans—is fundamental to the assessment of student loan systems because it affects the probability of students defaulting on loan repayment, and because it bears on debtors’ consumption and standard of living. We show that Stafford loans imply extremely difficult financial circumstances for a minority of U.S. loan recipients, and that income-contingent loans can solve those problems. The financial benefits of income-contingent loans are illustrated through a hypothetical student loan experience.
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Dotti Sani, Giulia M., and Claudia Acciai. "Two hearts and a loan? Mortgages, employment insecurity and earnings among young couples in six European countries." Urban Studies 55, no. 11 (August 14, 2017): 2451–69. http://dx.doi.org/10.1177/0042098017717211.
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Homeownership is increasingly understood by policy makers and social scientists as a fundamental asset against poverty risks, especially in times of economic uncertainty. However, in several Western countries, homeownership among younger generations appears to be increasingly difficult to achieve, likely a result of growing employment instability and stringent criteria to access credit. This article uses multinomial logistic models and nationally representative EU-SILC data from six European countries to examine (a) to what extent precarious employment among young couples is linked to being a mortgage holder; (b) whether earned income can compensate for employment instability in being a mortgagee; (c) cross-national differences in the relationship between being a mortgage holder, earnings, and employment insecurity. Our results indicate that the higher the levels of employment insecurity, the lower the chances of being a mortgage holder in all countries. Moreover, we find that at a given level of employment insecurity, households with higher levels of earned income have higher chances of being mortgage holders than households with lower earned income. However, while earned income has a stronger effect in achieving a mortgage among couples who have secure employment in Italy, earnings are more important among couples with lower levels of employment security in France, the UK, Spain and Poland. These results suggest that the relationship between social inequalities and housing is partially mediated by the national context.
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CHUDNOVETS, Aleksei Yu, and Sodnom B. BAINOV. "Conditional optimization of mortgage loan parameters." Economic Analysis: Theory and Practice 20, no. 3 (March 30, 2021): 577–88. http://dx.doi.org/10.24891/ea.20.3.577.
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Subject. In the article, we calculate the period of a borrowing, in which the interest burden and monthly payments are minimal. Objectives. The aim is to create an algorithm to optimize the term of the mortgage loan, taking into account the amount of debt and interest rate of the loan. Methods. The study employs methods to analyze the formula of annuity payments of a mortgage loan, and to model the final optimization algorithm. Results. We developed an algorithm, to determine the optimal term of the loan, using the certain loan amount and interest rate. The study considers the case for banks, operating in Krasnoyarsk. Conclusions. The paper considers two parameters of a mortgage loan, i.e. the interest burden and the monthly payment, which is calculated, according to the annuity formula. Both parameters depend on the loan amount, the interest rate, and the period of the loan. However, the interest rate is set by the bank, so the only parameter that the borrower can change is the period of payment. By changing the term to maturity, it is possible to have a loan with minimum payments and interest burden. For the purpose of optimization, we consider both parameters simultaneously. Taking into account their versatile nature, we consider the optimal time, when payments and interest burden are minimized. The paper also reviews the case of optimization of credit parameters for construction enterprises of the Krasnoyarsk Krai, in various banks.
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Kuebler, Meghan. "Lending in the Modern Era: Does Racial Composition of Neighborhoods Matter When Individuals Seek Home Financing? A Pilot Study in New England." City & Community 11, no. 1 (March 2012): 31–50. http://dx.doi.org/10.1111/j.1540-6040.2011.01391.x.
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This article explores the relationship between racial composition of neighborhoods and approval and origination of mortgages. It measures independent neighborhood effects, above and beyond applicant race effects preceding the recent housing market crisis for rental and owner–occupied homes. Mortgage applications are selected from the dozen most populated metropolitan areas in New England. Applications are linked to corresponding neighborhood data and generalized linear mixed modeling is applied. Data include prehousing market crash Housing Mortgage Disclosure Act data matched to American Community Survey 5–year data for over one million applications. Findings indicate, although controlling for income, gender, and race of the applicant, poverty and tenure, and additional socioeconomic variables, neighborhood racial composition has a statistically significant effect on whether mortgages are approved and originated. Minority presence is correlated with a negative effect on mortgage origination regardless of race of the individual loan applicant. More specifically, whites’ applications are also turned down in minority neighborhoods, especially black neighborhoods.
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Han, Xing, and Qian Li. "China Urban Housing Reverse Mortgage Loan Risk and its Countermeasures." Advanced Materials Research 518-523 (May 2012): 4481–86. http://dx.doi.org/10.4028/www.scientific.net/amr.518-523.4481.
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the paper first from the present the trend of aging, expounds the main concept of this paper and involved in the background and significance, for housing reverse mortgage loan introduces connotation above thus puts forward to the borrower risk identification framework, the life expectancy, future housing value fluctuation, loan interest and so on various risk factors, and the correlation analysis of its generating mechanism analysis. Meanwhile to prevent these risks were expounded. Finally, in housing reverse mortgage loan theory research and risk research put forward, based on the practice in housing reverse mortgage loan risk management some concrete measures and Suggestions.
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Dobek, Rafał. "Ludwik Wołowski and His Contribution to the French Credit Revolution of the 19th Century." Studia Historiae Oeconomicae 39, no. 1 (December 1, 2021): 3–32. http://dx.doi.org/10.2478/sho-2021-0001.
Full textAbstract:
Abstract Ludwik Wołowski was a Polish November emigrant in France. There, he gained recognition as an outstanding economist, banker and republican politician. The article focuses on the issue of mortgage loan, which is extremely important for Wołowski. It presents both the theoretical concepts of the Pole from 1834, his political activity in the years 1848–1851 aimed at changing the provisions of the mortgage law in France, and finally the moment of co-creation by Wołowski Crédit Foncier, the first modern mortgage bank in France, and the further history of the bank managed by Wołowski, in the board of which he sat until his death in 1876. In the first part, the text presents not only the criticism of the French mortgage system by Wołowski (primarily the so-called secret mortgages), but also his draft changes and the loan and mortgage model proposed by him and the companies that may grant it. In the second, it shows the parliamentary activity of Wołowski, an attempt to force through appropriate changes in the banking law and the reasons for its defeat. In the third, the most extensive, the article describes not only the very moment of establishing Crédit Foncier and the two-year period of management by Wołowski, but also the further, controversial operation of the bank until the second half of the 1870s. All this against the backdrop of the changing French Monarchy of July, the Second Republic and the Second Empire.