Rise in Mortgage Defaults PDF Download
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Author:
Publisher: DIANE Publishing
ISBN: 1437985335
Category :
Languages : en
Pages : 37
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Book Description
Author:
Publisher: DIANE Publishing
ISBN: 1437985335
Category :
Languages : en
Pages : 37
Get Book Here
Book Description
Author: Gene Amromin
Publisher: DIANE Publishing
ISBN: 1437919189
Category :
Languages : en
Pages : 37
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Book Description
This article compares default patterns among prime and subprime mortgages, analyzes the factors correlated with default, and examines how forecasts of defaults are affected by alternative assumptions about trends in home prices. The authors find that extremely pessimistic forecasts of home price appreciation could have generated predictions of subprime defaults that were closer to the actual default experience for loans originated in 2006 and 2007. However, for prime loans one would have also had to anticipate that defaults would become much more sensitive to home prices. Tables and graphs.
Author: James Martin
Publisher:
ISBN:
Category : Financial crises
Languages : en
Pages : 23
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Book Description
Recent dramatic increases in the level of home mortgage defaults by subprime borrowers have focused intense regulator and media scrutiny upon the potential causes of the increases. In an analysis of causation, this paper examines the increased availability and usage of non-traditional mortgages such as adjustable rate mortgages and interest only loans by borrowers with weak credit. This paper also reviews the impact of decreasing real estate values on mortgage defaults. However, most significantly, this paper adds to the body of knowledge on subprime mortgage lending by evaluating the interrelationship of real estate values, borrower income, and income disparity in driving the increase in mortgage defaults. Our findings strongly support a conclusion that an American desire to "keep up with the Joneses" is a contributing cause to the increase in subprime mortgage defaults. Conspicuous consumption and competitive consumption are also linked to the concept of "keeping up with the Joneses."
Author: Adam B. Ashcraft
Publisher: DIANE Publishing
ISBN: 1437925146
Category :
Languages : en
Pages : 76
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Book Description
Provides an overview of the subprime mortgage securitization process and the seven key informational frictions that arise. Discusses the ways that market participants work to minimize these frictions and speculate on how this process broke down. Continues with a complete picture of the subprime borrower and the subprime loan, discussing both predatory borrowing and predatory lending. Presents the key structural features of a typical subprime securitization, documents how rating agencies assign credit ratings to mortgage-backed securities, and outlines how these agencies monitor the performance of mortgage pools over time. The authors draw upon the example of a mortgage pool securitized by New Century Financial during 2006. Illustrations.
Author: Shane M. Sherlund
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
Author: Kristopher S. Gerardi
Publisher: DIANE Publishing
ISBN: 1437929850
Category : Business & Economics
Languages : en
Pages : 75
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Book Description
This is a print on demand edition of a hard to find publication. Explores the question of whether market participants could have or should have anticipated the large increase in foreclosures that occurred in 2007 and 2008. Most of these foreclosures stemmed from loans originated in 2005 and 2006, leading many to suspect that lenders originated a large volume of extremely risky loans during this period. While loans originated in this period did carry extra risk factors, underwriting standards alone cannot explain the dramatic rise in foreclosures. Market participants should have understood that a significant fall in prices would cause a large increase in foreclosures. Analysts understood that a fall in prices would have disastrous consequences for the market but assigned a low probability to such an outcome. Charts and tables.
Author: Kristopher Gerardi
Publisher: DIANE Publishing
ISBN: 143793398X
Category : Language Arts & Disciplines
Languages : en
Pages : 54
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Book Description
Investigates whether a particular aspect of borrowers' financial literacy ¿ their numerical ability ¿ may have played a role in the subprime mortgage collapse. The authors measure several aspects of financial literacy and cognitive ability in a survey of subprime mortgage borrowers who took out mortgages in 2006 or 2007 and match these measures to objective data on mortgage characteristics and repayment performance. The result: a large and statistically significant negative correlation between numerical ability and various measures of delinquency and default. Foreclosure starts are approximately 2/3 lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured level. Illus.
Author: Laurie S. Goodman
Publisher: John Wiley & Sons
ISBN: 0470392746
Category : Business & Economics
Languages : en
Pages : 352
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Book Description
Mortgage credit derivatives are a risky business, especially of late. Written by an expert author team of UBS practitioners-Laurie Goodman, Shumin Li, Douglas Lucas, and Thomas Zimmerman-along with Frank Fabozzi of Yale University, Subprime Mortgage Credit Derivatives covers state-of-the-art instruments and strategies for managing a portfolio of mortgage credits in today's volatile climate. Divided into four parts, this book addresses a variety of important topics, including mortgage credit (non-agency, first and second lien), mortgage securitizations (alternate structures and subprime triggers), credit default swaps on mortgage securities (ABX, cash synthetic relationships, CDO credit default swaps), and much more. In addition, the authors outline the origins of the subprime crisis, showing how during the 2004-2006 period, as housing became less affordable, origination standards were stretched-and when home price appreciation then turned to home price depreciation, defaults and delinquencies rose across the board. The recent growth in subprime lending, along with a number of other industry factors, has made the demand for timely knowledge and solutions greater than ever before, and this guide contains the information financial professionals need to succeed in this challenging field.
Author: Ebiere Okah
Publisher: DIANE Publishing
ISBN: 1437930921
Category : Business & Economics
Languages : en
Pages : 40
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Book Description
Subprime mortgage lending expanded in New York City between 2004 and mid-2007, and delinquencies on these subprime loans have been rising sharply. The authors describe the main features of this lending and model the performance of these loans. These subprime loans are found to be clustered in neighborhoods where average borrower credit quality is low and, unlike prime mortgage loans, where African-Americans and Hispanics constitute relatively large shares of the population. The authors estimate a model of the likelihood that these loans will become seriously delinquent and find a significant role for credit quality of borrowers, debt-to-income and loan-to-value ratios at the time of loan origination, and estimates of the loss of home equity. Illus.
Author: Kristopher Gerardi
Publisher:
ISBN:
Category :
Languages : en
Pages : 54
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Book Description
The exact cause of the massive defaults and foreclosures in the U.S. subprime mortgage market is still unclear. This paper investigates whether a particular aspect of borrowers' financial literacy - their numerical ability - may have played a role. We measure several aspects of financial literacy and cognitive ability in a survey of subprime mortgage borrowers who took out mortgages in 2006 or 2007 and match these measures to objective data on mortgage characteristics and repayment performance. We find a large and statistically significant negative correlation between numerical ability and various measures of delinquency and default. Foreclosure starts are approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured level. The result is robust to controlling for a broad set of sociodemographic variables and not driven by other aspects of cognitive ability or the characteristics of the mortgage contracts. Our results raise the possibility that limitations in certain aspects of financial literacy played an important role in the subprime mortgage crisis.
