Download or read book Spatial Heterogeneity in Mortgage Terminations by Refinance Sale and Default written by Yongheng Deng and published by . This book was released on 2005 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the impact of spatially correlated unobservable variables on the refinancing, selling, and default decisions of mortgage borrowers. Virtually the entire mortgage literature acknowledges that borrower specific characteristics, such as culture, education, or access to information, play an important role in the mortgage termination decisions. While we do not observe these variables directly, we note that borrowers of similar background tend to cluster together in neighborhoods. We propose a method to take advantage of this information and reconcile the theoretical option-based models of mortgage terminations with the empirical experience of mortgage refinancing, sale, and default.Specifically, we estimate a competing risks hazard model with random effect using a three-stage maximum likelihood estimation (3SMLE) approach with space-varying coefficient method (SVC) to modify the covariance structure according to the spatial distribution of the observations. Beyond a significant improvement of the model performance, this yields a number of insightful implications for mortgage termination behavior. For instance, borrowers of the affluent quot;West Sidequot; of Los Angeles County both refinance and move at a higher rate than predicted by the standard maximum likelihood estimation method. At the same time, borrowers from some lower-valued neighborhoods tend to stay longer than expected with their mortgages and properties. Such findings have direct implications for mortgage pricing and have the potential to ultimately improve the equity and efficiency of the lending markets.
Download or read book Journal of Housing Research written by and published by . This book was released on 2006 with total page 1430 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Routledge Handbook of Housing Policy and Planning written by Katrin B. Anacker and published by Routledge. This book was released on 2019-07-02 with total page 548 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Routledge Handbook of Housing Policy and Planning provides a comprehensive multidisciplinary overview of contemporary trends in housing studies, housing policies, planning for housing, and housing innovations in the United States, the United Kingdom, and Continental Europe. In 29 chapters, international scholars discuss aspects pertaining to the right to housing, inequality, homeownership, rental housing, social housing, senior housing, gentrification, cities and suburbs, and the future of housing policies. This book is essential reading for students, policy analysts, policymakers, practitioners, and activists, as well as others interested in housing policy and planning.
Download or read book Mortgage Terminations Heterogeneity and the Exercise of Mortgage Options written by John M. Quigley and published by . This book was released on 2005 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: As applied to the behavior of homeowners with mortgages, option theory predicts that mortgage prepayment or default will be exercised if the call or put option is in the money by some specific amount. Our analysis: tests the extent to which the option approach can explain default and prepayment behavior; evaluates the practical importance of modeling both options simultaneously; and models the unobserved heterogeneity of borrowers in the home mortgage market. The paper presents a unified model of the competing risks of mortgage termination by prepayment and default, considering the two hazards as dependent competing risks which are estimated jointly. It also accounts for the unobserved heterogeneity among borrowers, and estimates the unobserved heterogeneity simultaneously with the parameters and baseline hazards associated with prepayment and default functions.Our results show that the option model, in its most straightforward version, does a good job of explaining default and prepayment; but it is not enough by itself. The simultaneity of the options is very important empirically in explaining behavior. The results also show that there exists significant heterogeneity among mortgage borrowers. Ignoring this heterogeneity results in serious errors in estimating the prepayment behavior of homeowners.
Download or read book Mortgage Terminations Heterogeneity and the Exercise of Mortgage Options written by Yongheng Deng and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: As applied to the behavior of homeowners with mortgages, option theory predicts that mortgage prepayment or default will be exercised if the call or put option is in the money by some specific amount. Our analysis: tests the extent to which the option approach can explain default and prepayment behavior; evaluates the practical importance of modeling both options simultaneously; and models the unobserved heterogeneity of borrowers in the home mortgage market. The paper presents a unified model of the competing risks of mortgage termination by prepayment and default, considering the two hazards as dependent competing risks which are estimated jointly. It also accounts for the unobserved heterogeneity among borrowers, and estimates the unobserved heterogeneity simultaneously with the parameters and baseline hazards associated with prepayment and default functions. Our results show that the option model, in its most straightforward version, does a good job of explaining default and prepayment; but it is not enough by itself. The simultaneity of the options is very important empirically in explaining behavior. The results also show that there exists significant heterogeneity among mortgage borrowers. Ignoring this heterogeneity results in serious errors in estimating the prepayment behavior of homeowners.
Download or read book Household Credit Usage written by B. W. Ambrose and published by Springer. This book was released on 2007-10-29 with total page 293 pages. Available in PDF, EPUB and Kindle. Book excerpt: In response to growing interest in household finance, this collection of essays with a foreword by John Y. Campbell, studies household and consumer use of credit instruments. It shows how individual consumers and households utilize various credit alternatives in managing their consumption and savings and suggests areas for future research.
Download or read book Housing Finance Policy in Emerging Markets written by Loic Chiquier and published by World Bank Publications. This book was released on 2009 with total page 540 pages. Available in PDF, EPUB and Kindle. Book excerpt: Housing finance markets have been changing dramatically in both emerging and developed economies. On the one hand, housing finance markets are expanding and represent a powerful engine for economic growth in many emerging economies. However, the unfolding sub-prime mortgage crisis highlights the risks and potential turbulence that this sector can introduce into the financial system when expanding without proper infrastructure and regulation. As housing finance keeps growing in emerging economies to match a rising demand for housing, new risk management approaches, business models, funding tools, and policy instruments can help. Yet many questions remain about the right balance between innovation and regulation, the extent of risks to the financial system, the appropriate role of the state to promote affordable housing, and the effects of the sub-prime crisis. This book provides a guide for policymakers dealing with housing finance in emerging markets. It highlights the prerequisites for an effective housing finance system; it lays out several policy alternatives and models of housing finance; and it explores the role of governments in expanding access to housing finance for lower-income households. There is no "best" model set out in this book. The aim is to provide a developmental roadmap that can be tailored and sequenced to each country's situation and timing.
Download or read book Unobserved Heterogeneity in Models of Competing Mortgage Termination written by John M. Clapp and published by . This book was released on 2005 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper extends unobserved heterogeneity to the multinomial logit model (MNL) framework in the context of mortgages terminated by refinance, move, or default. It tests for the importance of unobserved heterogeneity when borrower characteristics such as income, age and credit score are included to capture lender-observed heterogeneity. It does this by comparing the proportional hazard model (PHM) to MNL with and without mass-point estimates of unobserved heterogeneous groups of borrowers.The mass point mixed hazard model (MMH) yields larger and more significant coefficients for several important variables in the move model, whereas the MNL model without unobserved heterogeneity performs well with the refinance estimates. The MMH clearly dominates the alternative models in-sample and out-of-sample. However, it is sometimes difficult to obtain convergence for the models estimated jointly with mass points.
Download or read book Unobserved Heterogeneity in Models of Competing Mortgage Termination Risks written by John M. Clapp and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper extends unobserved heterogeneity to the multinomial logit model (MNL) framework in the context of mortgages terminated by refinance, move or default. It tests for the importance of unobserved heterogeneity when borrower characteristics such as income, age and credit score are included to capture lender-observed heterogeneity. It does this by comparing the proportional hazard model (PHM) to MNL with and without mass-point estimates of unobserved heterogeneous groups of borrowers. The mass point mixed hazard model (MMH) yields larger and more significant coefficients for several important variables in the move model, whereas the MNL model without unobserved heterogeneity performs well with the refinance estimates. The MMH clearly dominates the alternative models in-sample and out-of-sample. However, it is sometimes difficult to obtain convergence for the models estimated jointly with mass points.
Download or read book Public Real Estate Markets and Investments written by H. Kent Baker and published by Oxford University Press. This book was released on 2014-08-07 with total page 335 pages. Available in PDF, EPUB and Kindle. Book excerpt: Real estate is typically classified as an alternative to more traditional investments such as stocks and bonds. Real estate investing involves the purchase, ownership, management, rental, or sale of real estate for profit. Real estate investments can be both income producing and non-income producing. Although real estate can produce income like a bond and appreciate like a stock, this tangible asset has several unique characteristics as well as advantages and disadvantages relative to other investment alternatives. Benefits of including real estate in a portfolio include diversification, yield enhancement, risk reduction, tax management, and inflation hedging. Unlike traditional investments, investors in real estate have the ability to influence performance. Real estate has drawbacks in that it requires management, is costly and difficult to buy, sell, and operate, and sometimes has lower liquidity. Additionally, measuring the relative performance of real estate can be challenging. The purpose of this 14-chapter book is to provide an overview and synthesis of public real estate markets and investments in a global context. The book discusses the major types and the latest trends within public real estate markets and presents the results of research studies in a straightforward manner. It has three sections: (1) foundations of public real estate, (2) public debt markets and investments, and (3) public equity markets and investments. The book should be interest to various groups including academics, practitioners, investors, and students. Readers should gain a greater appreciation of what is needed for success when investing in public real estate markets. For more information about private real estate, read Private Real Estate Markets and Investments.
Download or read book Competing Risks of Mortgage Termination written by Andrey D. Pavlov and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Why, when, and who terminates their mortgages? The primary reasons for mortgage termination are refinancing, selling of the property, and default. This paper is the first to explicitly model these competing risks within a unified conceptual framework and provide a link between theoretical value maximizing mortgage termination models and empirical estimation. I find, for instance, that the refinancing risk is highly sensitive to interest rate changes and other variables capturing the value of the mortgage. On the other hand, the necessity to relocate, either through sale of the property or default, is sensitive to the local economic conditions but largely independent of the value of the mortgage.
Download or read book Implications of Spatial Modeling to Issues in Financial Economics and Real Estate written by Andrey Dimitrov Pavlov and published by . This book was released on 1999 with total page 310 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Housing and the Financial Crisis written by Edward L. Glaeser and published by University of Chicago Press. This book was released on 2013-08-19 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional wisdom held that housing prices couldn’t fall. But the spectacular boom and bust of the housing market during the first decade of the twenty-first century and millions of foreclosed homeowners have made it clear that housing is no different from any other asset in its ability to climb and crash. Housing and the Financial Crisis looks at what happened to prices and construction both during and after the housing boom in different parts of the American housing market, accounting for why certain areas experienced less volatility than others. It then examines the causes of the boom and bust, including the availability of credit, the perceived risk reduction due to the securitization of mortgages, and the increase in lending from foreign sources. Finally, it examines a range of policies that might address some of the sources of recent instability.
Download or read book Complex Mortgages CM written by Gene Amromin and published by DIANE Publishing. This book was released on 2011 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: CM became a popular borrowing instrument during the bullish housing market of the early 2000s but vanished rapidly during the subsequent downturn. These non-traditional loans (interest only, negative amortization, and teaser mortgages) enable households to postpone loan repayment compared to traditional mortgages and hence relax borrowing constraints. But, they increase household leverage and heighten dependence on mortgage refinancing. CM were chosen by prime borrowers with high income levels seeking to purchase expensive houses relative to their incomes. Borrowers with CM experience substantially higher ex post default rates than borrowers with traditional mortgages with similar characteristics. Illus. This is a print on demand report.
Download or read book An Opportunity for a Different Peru written by Marcelo Giugale and published by World Bank Publications. This book was released on 2007 with total page 860 pages. Available in PDF, EPUB and Kindle. Book excerpt: For the first time in the republican history of Peru, the presidential transition takes place in democracy, social peace, fast economic growth and favorable world markets. In other words, there has never been a better chance to build a different Peru - a richer country, more equal and governable. There are multiple ways to achieve that goal. New reforms must stem from a widespread and participatory debate, one of a common vision conceived for and by Peruvians. This book aims at making a technical and independent contribution to such debate; it summarizes the knowledge available about the challenges to be faced by the new administration. The study does not recommend silver bullets, but suggests policy options. It is based on the analysis of the current reality and in six decades of relationships with Peru, in which the Bank has implemented more than 100 projects and prepared more than 500 technical reports covering the wide range of development topics. When necessary, the study provides lessons that the Bank has learned elsewhere. The study provides a conceptual framework to the analysis of the country's 34 economic sectors and the two historical perspectives behind them. In doing so, it offers a comprehensive reform agenda that sheds light on possible priorities and courses of action.
Download or read book Housing Market Dynamics in Africa written by El-hadj M. Bah and published by Springer. This book was released on 2018-03-12 with total page 285 pages. Available in PDF, EPUB and Kindle. Book excerpt: This open access book utilizes new data to thoroughly analyze the main factors currently shaping the African housing market. Some of these factors include the supply and demand for housing finance, land tenure security issues, construction cost conundrum, infrastructure provision, and low-cost housing alternatives. Through detailed analysis, the authors investigate the political economy surrounding the continent’s housing market and the constraints that behind-the-scenes policy makers need to address in their attempts to provide affordable housing for the majority in need. With Africa’s urban population growing rapidly, this study highlights how broad demographic shifts and rapid urbanization are placing enormous pressure on the limited infrastructure in many cities and stretching the economic and social fabric of municipalities to their breaking point. But beyond providing a snapshot of the present conditions of the African housing market, the book offers recommendations and actionable measures for policy makers and other stakeholders on how best to provide affordable housing and alleviate Africa’s housing deficit. This work will be of particular interest to practitioners, non-governmental organizations, private sector actors, students and researchers of economic policy, international development, and urban development.
Download or read book The Housing Challenge in Emerging Asia written by Matthias Helbe and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Housing Challenge in Emerging Asia: Options and Solutions provides new insights and ideas to best design and implement housing policies aimed at improving access to affordable and adequate housing. The book offers an innovative theoretical framework to conceptualize and analyze various housing policies. It also critically reviews housing policies of various countries and draws lessons for others. The countries studied include advanced economies within and outside Asia, such as Japan, the Republic of Korea, Singapore, Switzerland, the United Kingdom, and the United States, as well as emerging countries within Asia, such as the People's Republic of China and India.
