scholarly journals A Multi-State Approach to Modelling Intermediate Events and Multiple Mortgage Loan Outcomes

Risks ◽  
2020 ◽  
Vol 8 (2) ◽  
pp. 64
Author(s):  
Richard Chamboko ◽  
Jorge Miguel Bravo
Keyword(s):  
Interest Rates ◽  
Policy Implications ◽  
Mortgage Loan ◽  
Key Factors ◽  
Mortgage Loans ◽  
Factors Affecting ◽  
Short Sale ◽  
Property Type ◽  
Income Ratio ◽  
Over Time

This paper proposes a novel system-wide multi-state framework to model state occupations and the transitions among current, delinquency, default, prepayment, repurchase, short sale and foreclosure on mortgage loans. The approach allows for the modelling of the progression of borrowers from one state to another to fully understand the risks of a cohort of borrowers over time. We use a multi-state Markov model to model the transitions to and from various states. The key factors affecting the transition into various loan outcomes are the ability to pay as measured by debt-to-income ratio, equity as marked by loan-to-value ratio, interest rates and the property type. Our findings have broader policy implications for better decision-making on granting loans and the design of debt relief and mortgage modification policies.

scholarly journals Analysis of Housing Market Dynamics Considering the Structural Characteristics of Mortgage Interest

2021 ◽  
Vol 13 (19) ◽  
pp. 10523
Author(s):  
Insoo Baek ◽  
Sanghyo Lee ◽  
Joosung Lee ◽  
Jaejun Kim
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Housing Market ◽  
Structural Characteristics ◽  
Housing Demand ◽  
Market Mechanism ◽  
Policy Implications ◽  
Mortgage Loan ◽  
Market Mechanisms ◽  
The Government

Mortgage loan interest rates consists of base interest and spread. In general, the base interest is adjusted by the government for the sustainability of the housing market. On the other hand, spread is determined by market mechanisms. Accordingly, the change pattern of base interest and spread may appear differently depending on the market situation. In the end, the effect of the government’s market intervention through interest rate policy may be different than expected. In this respect, the purpose of this paper is to analyze the effects of base interest and spread of the mortgage loan interest rate on the housing market and to derive important policy implications for the sustainability of the housing market. As a result of this study, the ineffectiveness of the government’s interest rate policies on the stability of the housing market was confirmed. The market mechanisms had more significant effects on the sustainability of the housing market than artificial political intervention. Further, housing supply policies based on the market mechanism could be more effective than housing demand policies based on interest-rate adjustments.

scholarly journals Loan to Value Caps and Government-Backed Mortgage Insurance: Loan-Level Evidence from Dutch Residential Mortgages

De Economist ◽  
2020 ◽  
Vol 168 (4) ◽  
pp. 453-473
Author(s):  
Leo de Haan ◽  
Mauro Mastrogiacomo
Keyword(s):  
Credit Risk ◽  
Policy Implication ◽  
Debt Service ◽  
Mortgage Loan ◽  
Mortgage Loans ◽  
Mortgage Insurance ◽  
Level Data ◽  
Model Predictions ◽  
Income Ratio ◽  
Loan Guarantees

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.

scholarly journals Mortgage volume and macroeconomic factors: Evidence from Turkey

2021 ◽  
Vol 9 (4) ◽  
pp. 1504-1520
Author(s):  
Tuğba Güneş ◽  
Ayşen Apaydın
Keyword(s):  
Interest Rates ◽  
House Prices ◽  
Mortgage Market ◽  
Mortgage Loan ◽  
Response Analysis ◽  
Mortgage Loans ◽  
Macroeconomic Factors ◽  
Mortgage Interest ◽  
Mortgage Interest Rates ◽  
Turkish Lira

This paper investigates the impacts of several macroeconomic variables on Turkey's volume of mortgage loans. Johansen cointegration test, vector error correction model, Granger causality tests, variance decomposition, and impulse-response analysis is employed for the econometric analysis to show short and long-run relationships between the variables using time series monthly data from January 2010 to March 2020. Paper results demonstrate that growth of housing credit size negatively correlates with mortgage interest rates, US Dollar/Turkish Lira exchange rate and level of real estate supply. At the same time, there is a positive correlation with house prices. Causal relationships between mortgage volume and macroeconomic indicators are bidirectional for all variables, except for mortgage interest rates. There is a one-way causality relationship from mortgage rates to mortgage loan volume. Econometric analyses show that the recent steep depreciation in the Turkish Lira hurts the Turkish mortgage market. In conclusion, a stable economic environment is essential to build a robust mortgage market.

scholarly journals DETERMINANTS OF MORTGAGE LOAN REPAYMENT IN GHANA

2021 ◽  
Vol 3 (4) ◽  
pp. 75-89
Author(s):  
Justice Agyei Ampofo ◽  
Isaac Mantey
Keyword(s):  
Interest Rates ◽  
Low Income ◽  
Occupational Status ◽  
Mortgage Market ◽  
Mortgage Loan ◽  
Primary Data ◽  
Mortgage Loans ◽  
Loan Repayment ◽  
Mortgage Industry ◽  
The Government

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.

scholarly journals Analysis of GDP Trends and Inequalities in Vietnam’s Provinces and Groups of Provinces

2016 ◽  
Vol 6 (7) ◽  
pp. 167-186
Author(s):  
Xuan-Binh Vu ◽  
Son Nghiem
Keyword(s):  
National Average ◽  
Policy Implications ◽  
Current Paper ◽  
Gdp Per Capita ◽  
Ho Chi Minh City ◽  
Growth Path ◽  
Key Factors ◽  
Factors Affecting ◽  
Per Capita

Our recent paper (Vu et al., 2016) applied the Phillips and Sul’s method (2007, 2009) and found that the 61 provinces of Vietnam were formed in five convergence sub-groups. This current paper identifies trends and patterns of inequality in provincial GDP per capita of each sub-group of provinces in Vietnam during the period 1990-2011. It also analyses the growth path of each province compared with that of the reference economy [Ho Chi Minh City (HCMC) and the national average]. The results show that there were the downward trends of inequality in GDP per capita of each sub-group. Also, during the period 1990-1994, most provinces diverged from HCMC but during the period 2004-2011, all provinces tended to converge to it. However, there were few poorest provinces, which tend to be located in geographically and economically isolated regions of Vietnam. This paper analyses main characteristics of provinces and key factors affecting the trends and patterns of disparities in GDP per capita of each sub-group. Furthermore, several policy implications are discussed.

scholarly journals Mortgage Loans and Impacts of the Global Pandemic COVID-19 in the Globalized Society

2021 ◽  
Vol 92 ◽  
pp. 01047
Author(s):  
Libuše Svobodová ◽  
Martina Hedvičáková
Keyword(s):  
Interest Rates ◽  
Financial Market ◽  
Financial Institution ◽  
Value Added ◽  
Theoretical Background ◽  
Mortgage Loan ◽  
Mortgage Loans ◽  
Loan Repayment ◽  
Building Society ◽  
Secondary Sources

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.

scholarly journals Fixed Or Variable Rate Choice In The Commercial Bank Business Loan Market

2011 ◽  
Vol 19 (4) ◽  
Author(s):  
Manoj Athavale ◽  
Robert O. Edmister
Keyword(s):  
Interest Rates ◽  
Significant Risk ◽  
Bank Loans ◽  
Mortgage Loan ◽  
Variable Rate ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Residential Mortgage ◽  
Business Loan ◽  
Choice Decision

We study the choice available to business borrowers and lenders between fixed rate and variable rate bank loans. Unlike previous studies that examine residential mortgage loans, this analysis examines commercial and industrial loans. Business loans differ in attributes from mortgage loans and hence provide an opportunity to test determinants of the mortgage loan choice decision for other loan types. The diversity of business loans also permits tests of any effect which lender size and borrower size may have on the choice decision. Using a continuous index of preferences for the variable rate commercial loan, we find that the determinants of the business loan choice decision are different from the determinants of the mortgage loan choice decision. In contrast to prior research, we find strong evidence contradicting the proposition that variable rate loans are merely a response to high and variable interest rates. Further, this the first study to reveal size as a determinant of loan choice. Larger banks and larger borrowers have a greater preference for variable rate loans. Our results combined with the consolidation occurring among banks leads to the conclusion that the observed shift to variable rate bank loans is not transitory, and poses a significant risk for businesses with asset returns uncorrelated with short-term loan rates.

Cultural Indoctrination

2015 ◽  
pp. 279-294
Author(s):  
Bryan Christiansen
Keyword(s):  
Social Capital ◽  
Theory And Practice ◽  
Future Application ◽  
Key Factors ◽  
Global Business ◽  
Factors Affecting ◽  
National Boundaries ◽  
Intelligence Education ◽  
Values Orientation ◽  
Over Time

The purpose of this chapter is to examine the potential influence of Cultural Indoctrination (CI) on organizations today in an era of global hypercompetition. It is axiomatic that one of the fundamental realities of contemporary globalism is most organizations today must be able to function successfully across cultural (and national) boundaries to sustain a competitive advantage and remain profitable over time. Achieving this goal requires management to appreciate and understand the key factors affecting global business today. However, none of these factors considers in-depth the vastly underresearched area CI we all experience from birth. This chapter examines the following factors involved in cultural indoctrination: Child Development, Cultural Intelligence, Education, Institutionalization, Nationalism and Patriotism, Religion, Self-Efficacy, Social Capital, and Values Orientation Theory (VOT). It is from these factors that a conceptual model is developed for potential future application in management theory and practice.

scholarly journals A Win–Win Scenario for Agricultural Green Development and Farmers’ Agricultural Income: An Empirical Analysis Based on the EKC Hypothesis

2021 ◽  
Vol 13 (15) ◽  
pp. 8278
Author(s):  
Yuanying Chi ◽  
Yangmei Xu ◽  
Xu Wang ◽  
Feng Jin ◽  
Jialin Li
Keyword(s):  
Policy Implications ◽  
Kuznets Curve ◽  
Low Carbon ◽  
Agricultural Labor ◽  
Key Factors ◽  
Positive Role ◽  
Factors Affecting ◽  
Agricultural Income ◽  
Capital Deepening ◽  
Green Development

Due to severe resource and environmental constraints, agricultural green development is a vital step for the low-carbon development of China. How to achieve the goal of a win–win scenario that simultaneously improves agricultural green total factor productivity (GTFP) and farmers’ agricultural income was the main focus of this study. Based on the panel dataset for 31 provinces in China from 2000 to 2018, this study calculated the agricultural GTFP using the global Malmquist–Luenberger (GML) index to measure the green development of agriculture. Furthermore, this study investigated the relationship between the agricultural GTFP and agricultural income in an environmental Kuznets curve (EKC) framework, together with the key factors affecting agricultural GTFP. The main results show that, first, driven by technical progress, the agricultural GTFP gradually increased across the country, while there existed a certain degree of heterogeneity in the growth of different regions. Second, the relationships between the agricultural GTFP and agricultural income exhibited a significant U-shape for the whole country and the four regions, indicating that a win–win scenario can be achieved between green development and income level. Third, industrialization and urbanization negatively affected agricultural GTFP, capital deepening played a positive role, and due to the mediated effect of capital deepening, the outflow of the agricultural labor force did not cause substantial harm to agricultural GTFP. The findings of our study provide useful policy implications for the promotion and development of agriculture in China.

Key factors in developing transit trade corridors in Northeast Asia

2017 ◽  
Vol 21 (3) ◽  
pp. 191-207 ◽  
Author(s):  
Sang-Won Lim ◽  
Kamonchanok Suthiwartnarueput ◽  
Ahmad Abareshi ◽  
Paul Tae-Woo Lee ◽  
Yann Duval
Keyword(s):  
Northeast Asia ◽  
Policy Implications ◽  
Policy Support ◽  
Transport Infrastructure ◽  
Primary Data ◽  
Regional Economies ◽  
Key Factors ◽  
Policy Makers ◽  
Content Type ◽  
Factors Affecting

Purpose The purpose of this paper is to investigate key critical factors for developing transit trade corridors (TTCs) in optimizing trade and logistics performance, taking into account economic, geographic and political concerns among countries in the Northeast Asia region, which have been dynamically developing TTCs to optimize trade and logistics performance in association with development of transport infrastructure in the Greater Tumen Region located in the Northeast Asia. Design/methodology/approach This research explores key factors affecting the TTC through a comprehensive literature review in tandem with expert survey. Factor analysis, both exploratory and confirmatory, is employed to further investigate the underlying factors affecting more efficient development of a TTC. Findings This research has drawn eight underlying factors affecting the design of a TTC: development and policy implications; safety, security and political concerns; environmental protection; financing and investment; soft infrastructure; hard infrastructure; geography and landscape; and corridor performance. Research limitations/implications This paper has a limited geographical scope of the Northeast Asia. Therefore, more primary data collection would be useful in future work. Development of International trade corridor and TTC is critical in northeast Asia for moving goods through designated geographical paths. The key factors drawn in this paper contributes not only to promoting its related services and information (across borders) with the provision of policy support and related facilities for TTC but also to lowering logistics costs and improving trades in the northeast Asian region. As a result, the countries in the region will accelerate their regional economies in collaboration with international bodies and framework, such as UNDP, Greater Tumen Initiative and One Belt One Road Initiative. Practical implications The eight underlying factors the authors identified in this research will be valuable for policy-makers to design TTCs and consequently the research will contribute to regional economies in northeast Asia by establishing efficient trade and transport routes among the countries in the region. Social implications Developing TTCs is a kind of platform and infrastructure to accelerate cargo movements and people movements in the northeast Asia. Users of TTCs will benefit their businesses thanks to an efficient logistics system and lower logistics costs, which result in promoting international and regional trade in the region. Originality/value There has not been any research done on factors to consider in developing TTCs in the world, whose consequence is no readily available reference that can support a systematic assessment and decision-making in development of TTCs. The findings of this research provide a helpful reference for policy-makers, potential users and developers of TTCs to refer in planning and developing them.

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