Download or read book Three Essays on Mortgage Refinancing written by and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on the Mortgage Market written by Munpyung O and published by . This book was released on 2010 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first paper reviews the existing theoretical work on the option-theoretic mortgage valuation. The mortgage market has become an increasingly important segment of the financial market. There are two strands in the mortgage valuation literature; reduced-form (econometric) and structural-form (option-theoretic) valuation model. The option theoretic model provides clear endogenous explanations as to why the mortgage termination occurs. This approach shows that the mortgage value is determined by the interaction between the contractual features of mortgages and the uncertain future economic environment.

Download or read book Three Essays on Mortgage Backed Securities written by and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Mortgage Curtailment written by Yingqi Xu and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation examines mortgage curtailment, an important household deleverage channel that has received little attention in the literature. In the first chapter, using Fannie Mae single-family loan performance data, I show that more than 20% of mortgage borrowers opt to curtail their mortgage payments in a given quarter if their mortgage was originated after 2009. These borrowers pay an additional USD500, which represents over 50% of their monthly mortgage payment and 15% of their income. Mortgage origination conditions matter more than mortgage lifetime events in determining curtailment. Mortgages originated after 2009 have a higher propensity for mortgage curtailment compared to those originated before 2009, at 22% versus 14%. Observable mortgage characteristics account for 60% of this difference, with higher income, higher credit scores, and lower debt-to-income ratios positively correlated with a higher curtailment propensity. Moreover, borrowers use curtailment as an alternative to refinancing when refinancing is not cost-effective in reducing interest costs, as shown by the negative correlation between mortgage rate incentive and curtailment propensity. In the second chapter, I investigate borrowers' mortgage curtailment behavior after refinancing through the HARP program. On average, borrowers who refinance through HARP pay USD223 more per month than before they enter the program, which is equivalent to 18.7% of the monthly required mortgage payment. Additionally, higher income, higher credit scores borrowers, and mortgages with lower origination LTV ratios tend to contribute more. To address the endogeneity issue, I use the quasi experiment setup of the HARP program's eligibility condition. The results suggest that HARP eligibility leads borrowers to curtail USD37.7 more than ineligible borrowers, with high original LTV borrowers being more likely to contribute more. Households increase curtailment while both income effect and intertemporal substitution effect are at play, indicating that they are more sensitive to changes in liquidity than to changes in mortgage rates.

Download or read book An Insider s Guide to Refinancing Your Mortgage written by David Reed and published by AMACOM Div American Mgmt Assn. This book was released on 2008-09-15 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt: For many homeowners, refinancing a mortgage can save them significant money, considerably reducing their monthly payments. It can also give them breathing space to pay off debts or allow them to make other investments, pay for college, or finance home improvements. An Insider’s Guide to Refinancing Your Mortgage is dedicated to an often-misunderstood aspect of mortgage lending: refinancing a mortgage loan. Readers will learn why to refinance, when to finance, as well as how to find the best lender, loan officer, and rate. Mortgage expert David Reed takes readers step bystep through the refinance process and shows them how to evaluate their current loan program and compare it with other options. By following Reed’s invaluable advice, homeowners will learn: when a refinance is right for them • how to lock in the absolute lowest rate at the lowest cost • how the mortgage process works from the inside • how loan officers get paid • how to identify and avoid predatory lenders • how to negotiate closing costs An Insider’s Guide to Refinancing Your Mortgage will save readers money and heartache when negotiating a loan.

Download or read book Three Essays on Financial Market Innovation written by Mondschean Thomas Herbert and published by . This book was released on 1989 with total page 422 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Household Behavior written by Katherine Grace Carman and published by . This book was released on 2003 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on the Value of Collateral on the Supply of Credit and on the Sources of Business Fluctuations written by Michael Marschoun and published by . This book was released on 1998 with total page 424 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on the U S Mortgage Market written by Chen Zheng and published by . This book was released on 2021 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies different aspects of the U.S. mortgage market, an important sector of the entire economy. The first chapter focus on the refinance market for residential mortgage, while the second and third chapter explores the previously overlooked non-agency mortgage servicing industry. The first chapter (joint with Xiaoye Tian) studies the unintended consequences arising from program design, and how it augments the market power of incumbent lenders, in the context of a federal program called Home Affordable Refinance Program. We build a dynamic discrete choice model of refinance decision where the payoff is generated from a search and negotiation process. We estimate the model using data on program participation and pricing decision. The estimation exploits a significant change to the program design that gives exogenous variation in the competitive advantage of incumbent lenders under the program. In a counterfactual where the advantage granted by program design is shut down, we find that it leads to an average welfare improvement of $4,977. The insight from this study could apply to other policies whose implementation depends on intermediaries with incumbency advantage with respect to targeted agents. The second chapter (joint with Moussa Diop) explores incentive issues associated with the servicer compensation structure in non-agency securitizations. First, we document key stylized facts on servicing fees. We show that they decrease with loan quality, loan amount, and loan maturity; suggest economies of scale in servicing; increase with the intensity of default in outstanding deals; and are lower on issuer-serviced loans. As a key contribution of this study, we show that servicing fees play a significant role in mortgage modification and foreclosure as servicers protect their cash flows, possibly to the detriment of security investors, by keeping alive loans paying high fees. As the government retrenches from housing finance, leaving room for private lending and securitization, this incentive problem in servicing will become a pressing issue for regulators to address. In the third chapter (joint with Moussa Diop), we examine the informativeness of servicing fees about the quality of non-agency mortgage collateral pools and, ultimately, the value of the mortgage-backed securities. We find that servicing fees capture unobservable credit risk that explains mortgage default and differentially affects the performance of various security classes. However, security yields at issuance appropriately reflect for this risk, which suggests that investors were more sophisticated than previously thought or that deal issuers were more transparent about collateral credit risk than recognized in the literature. The slow reemergence of non-prime lending as non-qualified mortgages makes the findings of this study still relevant.

Download or read book Three Essays on Reputation in Rural Credit Markets written by Reka Sundaram-Stukel and published by . This book was released on 2005 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Housing and Credit Market written by Won Suk Chung and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is comprised of three chapters focusing on housing and credit market. The first and the third chapter analyze how a housing affects business cycle through lending constraints and mortgage contracts, while the second chapter investigates the decoupling credit markets by firms during the recession periods.The first chapter studies the business cycle asymmetry of consumption and house prices in the US. It shows that the credit shock leads to business cycle asymmetry of consumption and house prices, but the housing belief shock does not cause the business cycle asymmetry. In a New Keynesian model with a housing, the occasionally binding lending constraint leads to an asymmetric response of consumption and house prices to the credit supply shock, not the housing belief shock.The second chapter investigates the decoupling phenomenon between loans and corporate bonds markets during the recession periods. I show that by an expansionary monetary policy, a large firm increases long-term debt, but a small firm decreases long-term debt. A `cash-flow' constraint prevents the small firm from obtaining more loans via bank-lending following the expansionary Quantitative Easing (QE) or Corporate Credit Facility (CCF) policy. However, the large firm can issue more corporate bonds because it is not constrained by the 'cash-flow' constraint.The third chapter focuses on the responses of macro variables depending on mortgage designs: the fixed-rate mortgage (FRM) and the adjustable-rate mortgage (ARM). I show that the monetary policy effects in the ARM-economy is stronger than in the FRM-economy. The constraint switching effect of output and house prices in the ARM-economy in response to the monetary policy is greater than the one in the FRM-economy. The refinancing effect enhances the response of output in the FRM-economy due to rate incentive and cash-out incentive. However, the endogenous refinancing effect is smaller than the exogenous refinancing effect in the ARM-economy because the ARM-economy satisfies the rate incentive and the refinancing transaction costs are required.

Download or read book Mortgage Refinancing Consumer Spending and Competition written by Sumit Agarwal and published by . This book was released on 2015 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the ability of the government to impact mortgage refinancing activity and spur consumption by focusing on the Home Affordable Refinancing Program (HARP). The policy allowed intermediaries to refinance insufficiently collateralized mortgages by extending government credit guarantee on such loans. We use proprietary loan-level panel data from a large market participant with refinancing history and social security number matched consumer credit records of each borrower. A difference-in-difference empirical design based on eligibility requirements of the program reveals a substantial increase in refinancing activity by the program: more than three million eligible borrowers with primarily fixed-rate mortgages -- the predominant contract type in the U.S. -- refinanced their loans under HARP. Borrowers received a reduction of around 140 basis points in interest rate, on average, due to HARP refinancing, amounting to about $3,500 in annual savings per borrower. There was a significant increase in the durable spending by borrowers after refinancing, with larger increase among more indebted borrowers. Regions more exposed to the program saw a relative increase in non-durable and durable consumer spending, a decline in foreclosure rates, and faster recovery in house prices. A variety of identification strategies reveal that competitive frictions in the refinancing market may have partly hampered the program's impact. On average, these frictions reduced take-up rate among eligible borrowers by 10%-20% and cut interest rate savings by 16-33 basis points, with larger effects among the most indebted borrowers who were the key target of the program. These findings have implications for future policy interventions, pass-through of monetary policy through household balance sheets, and design of the mortgage market.

Download or read book The Blackwell Companion to the Economics of Housing written by Susan J. Smith and published by John Wiley & Sons. This book was released on 2010-01-22 with total page 648 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Blackwell Companion to the Economics of Housing willhelp students and professionals alike to explore key elements ofthe housing economy: home prices, housing wealth, mortgage debt,and financial risk. Features 24 original essays, including an editorialintroduction and three section overviews Includes 39 world-class authors from a mix of educational andfinancial organizations in the UK, Europe, Australia, and NorthAmerica Broadly-based, scholarly, and accessible, serving students andprofessionals who wish to understand how today’s housingeconomy works Profiles the role and relevance of housing wealth; themismanagement of mortgage debt; and the pitfalls and potential ofhedging housing risk Key topics include: the housing price bubble and crash; thesubprime mortgage crisis in the US and its aftermath; the linksbetween housing wealth, the macroeconomy, and the welfare ofhome-occupiers; the mitigation of credit and housing investmentrisks Specific case studies help to illustrate concepts, along withnew data sets and analyses to illustrate empirical points

Download or read book Three Essays in Asset Pricing Theory written by Lionel Martellini and published by . This book was released on 2000 with total page 390 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dissertation Abstracts International written by and published by . This book was released on 2009 with total page 640 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on International Economics and Finance written by Juan Antonio Montecino and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies the macroeconomic and social impacts of two increasingly common macroeconomic policies: restrictions on international capital mobility -- capital controls -- and so-called unconventional monetary policy -- often referred to as "quantitative easing." The consensus view is that capital controls can effectively lengthen the maturity composition of capital inflows and increase the independence of monetary policy but are not generally effective at reducing net inflows and influencing the real exchange rate. The first essay presents empirical evidence that although capital controls may not directly affect the long-run equilibrium level of the real exchange rate, they may enable disequilibria to persist for an extended period of time relative to the absence of controls. Allowing the speed of adjustment to vary according to the intensity of restrictions on capital flows, it is shown that the real exchange rate converges to its long-run level at significantly slower rates in countries with capital controls. The second essay studies the social welfare implications of capital controls when controls are imperfectly binding and financial markets actively aim to bypass regulation. I consider a series of models of a small open economy featuring a "Dutch disease" externality arising from excessive capital inflows, as well as strategic interactions between a regulatory authority attempting to enforce capital controls and a financial sector attempting to evade them. The models suggest that capital controls, by internalizing externalities associated with capital inflows, can improve welfare relative to a "laissez-faire" benchmark even when these are imperfectly binding. The third and final essay uses data from the Federal Reserve's Tri-Annual Survey of Consumer Finances (SCF) to study the distributional impacts of quantitative easing in the U.S. since the 2008-9 financial crisis. I decompose the change in the distribution of income into three key impact channels of QE policy: 1) the employment channel 2) the asset appreciation and return channel, and 3) the mortgage refinancing channel. The results suggest that while employment changes and mortgage refinancing were equalizing, these impacts were nonetheless swamped by the large dis-equalizing effects of asset appreciations.

Download or read book Three Essays on Housing and Labor Economics written by XUE HU and published by . This book was released on 2017 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: These essays contribute towards our understanding of housing and labor economics. This dissertation is composed of three chapters. In the first chapter, I explore the impact of negative housing equity on households' geo- graphical mobility using data from Panel Study of Income Dynamics. The empirical analysis implies that addressing the endogeneity nature of homeowners' underwater mortgage status is crucial. Even with comprehensive controls for households' demographic characteristics and macro-level factors, omitted variable bias such as homeowners' attitudes towards their financial responsibility may still generate estimation bias that is quite large. After proper instrumenting for homeowners' underwater mortgage status using local shocks from housing and labor markets, the estimation results show that having underwater mortgages is associated with an average decline in mobility rate of about 17 percentage points. The second chapter investigates the role of housing choice and mortgage on employment transitions when there are uncertainties regarding income and house prices. Motivated by the empirical evidence on large employment-transition disparities between homeowners and renters, I develop and estimate a structural model in which mortgage obligations motivate homeowners to exert greater job-search efforts during unemployment spells. The model is used to understand individuals' response to housing and labor market shocks. I find that while the decline in house prices creates negative labor market externalities for renters, tightening mortgage constraints result in greater job search incentives for homeowners. With concurrent negative labor market shocks, the probability of transitioning out of unemployment for both renters and homeowners declines. Two policy experiments are conducted. The first shows that lower refinance cost discourages housing equity accumulation and is associated with a decline in the average employment rate. The second demonstrates that a lower down payment requirement encourages the transition into home ownership, which has positive labor market implications, especially for younger individuals. The first two chapters explore the relation between underwater mortgage and geographical mobility and impacts of mortgage debt obligation on employment incentives. Both analyses are based on individual-level data. The last chapter investigates the mysteries of regional housing market disparities from a macro perspective. This chapter shows that local economic conditions are correlated with deviations between house prices and rents in a price-rent model framework, suggesting that the demand for credit and housing is greater when a variety of local economic conditions are more supportive. Several different measures of local economic conditions are considered in this chapter: local unemployment rates, local unemployment rates relative to the natural rate of unemployment, local inflation rates, and measures of local perceptions of the cost of credit. This chapter attempts to offer explanations not as how or why house prices increased, but rather, given the myriad of national factors making home purchase easier and cheaper, where house prices increased. This approach also resolves a bit of a puzzle as to why the housing bubble was so pronounced in some areas and not others.