scholarly journals International Real Estate Review

2019 ◽  
Vol 22 (2) ◽  
pp. 169-196
Author(s):  
Shan Jiang ◽  
◽  
Chen L. Miller ◽  
Keyword(s):  
Interest Rate ◽  
The United States ◽  
Home Equity ◽  
Macroeconomic Conditions ◽  
Federal Housing ◽  
Home Equity Conversion Mortgage ◽  
Reverse Mortgages ◽  
And Gender ◽  
The Interest Rate ◽  
In The Beginning

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.

Exploring HECM counselors’ fraud awareness and training

2014 ◽  
Vol 21 (4) ◽  
pp. 484-494
Author(s):  
Martin C. Seay ◽  
Andrew T. Carswell ◽  
Melissa Wilmarth ◽  
Lloyd G. Zimmerman
Keyword(s):  
Home Equity ◽  
Reverse Mortgage ◽  
Content Type ◽  
Mortgage Fraud ◽  
Federal Housing ◽  
Home Equity Conversion Mortgage ◽  
Reverse Mortgages ◽  
Fraudulent Activity ◽  
And Training

Purpose – The purpose of this research was to explore the growth of Home Equity Conversion Mortgage (HECM) fraud and the role of housing counselors in its identification and prevention. HECMs are the Federal Housing Administration endorsed version of a reverse mortgage and represent the majority of reverse mortgages on the market. Design/methodology/approach – To investigate HECM counselor’s training, and their ability to detect fraudulent activity, a survey was constructed and distributed nationwide using HUD’s publicly available roster of qualified agencies and counselors. The survey consisted of three main sections agency and respondent information including HECM certification process, typical interactions with clients, and mortgage fraud and HECM fraud. Findings – Responses indicate that HECM counselors have limited awareness of and training in identifying fraudulent activities. Originality/value – The case is made that additional training is needed to raise awareness among counselors so that they might better serve their clients. Given the sizable population that may legitimately need HECMs, it is important to improve awareness and provide training to detect fraudulent schemes and prevent this type of deception from occurring.

The Mechanism of Shifting From Direct Monetary Policies to Indirect Monetary Policies

2021 ◽  
Vol 39 (11) ◽  
Author(s):  
Saad Khalaf ◽  
Abdul Rahman Abdul Ridha ◽  
Hussein Habeeb
Keyword(s):  
Interest Rate ◽  
Main Tool ◽  
The United States ◽  
The European Union ◽  
Monetary Policies ◽  
Policy Makers ◽  
The United Kingdom ◽  
The World ◽  
New Policies ◽  
The Interest Rate

After 2008, a new term appeared on monetary policies after the direct monetary policies failed to reach a solution to the economic deficit that occurred in the economies of many countries, especially after the mortgage crisis that plagued the financial markets in most countries of the world, as these countries tried to reduce the interest rate to Zero or close to it in order to move the economy, but it did not respond despite the fact that the interest rate is the main tool and is considered the control stick in direct monetary policies.  Thus, it became imperative for those countries to use new tools in order to get out of that crisis. Japan is considered the first to use these new policies and solutions before that period, and he is the first to call them indirect monetary policies. These tools were called by many names, including quantitative easing, credit facilitation and others. Many names, but it was the best solution by monetary policy makers for many countries, including the United States of America, the United Kingdom of Britain and the European Union, which represent the most powerful economies in the world,

scholarly journals Monetary Policy Effects on Energy Sector Bubbles

Energies ◽  
2019 ◽  
Vol 12 (3) ◽  
pp. 472
Author(s):  
Petre Caraiani ◽  
Adrian Călin
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Asset Prices ◽  
The United States ◽  
Energy Sector ◽  
Monetary Policy Shocks ◽  
Policy Shocks ◽  
The Difference ◽  
The Interest Rate ◽  
The Impact

We investigate the effects of monetary policy shocks, including unconventional policy measures, on the bubbles of the energy sector, for the case of the United States. We estimate a time-varying Bayesian VAR model that allows for quantifying the impact of monetary policy shocks on asset prices and bubbles. The energy sector is measured through the S&P Energy Index, while bubbles are measured through the difference between asset prices and the corresponding dividends for the energy sector. We find significant differences in the impact of monetary policy shocks for the aggregate economy and for the energy sector. The findings seem sensitive to the interest rate use, i.e., whether one uses the shadow interest rate or the long-term interest rate.

Gender, Ethnicity, and Self-Employment: A Multilevel Analysis across US Metropolitan Areas

2009 ◽  
Vol 41 (8) ◽  
pp. 1979-1996 ◽  
Author(s):  
Qingfang Wang
Keyword(s):  
Labor Market ◽  
The United States ◽  
Ethnic Composition ◽  
Hierarchical Regression ◽  
Men And Women ◽  
Macroeconomic Conditions ◽  
Individual Level ◽  
Self Employment ◽  
And Gender ◽  
Gender Groups

Rates of self-employment differ among ethnic groups, between men and women, and by place. Using the 2000 5% Public Use Microdata Samples and hierarchical regression modeling, I examine in this study how metropolitan labor-market characteristics influence the probability of self-employment among non-Hispanic whites, blacks, Hispanics, and Asians in the United States, separately for men and women. The results show that, after controlling for individual-level characteristics, metropolitan labor-market characteristics—including macroeconomic conditions, overall business structure, ethnic composition, and residential segregation—significantly influence self-employment patterns across ethnic and gender groups.

scholarly journals Carry-Trade Returns and Segmented Risk Pricing

2021 ◽  
Author(s):  
Gordon Schulze
Keyword(s):  
Interest Rate ◽  
Stock Market ◽  
Risk Aversion ◽  
Stock Returns ◽  
The United States ◽  
Carry Trade ◽  
Risk Pricing ◽  
Country Differences ◽  
Cross Country ◽  
The Interest Rate

AbstractThe returns to carry-trades are controversially discussed. There seems to be no unifying risk-based explanation of currency returns and stock returns, while the countries’ interest rate differential plays a leading part in the carry-trade performance. Therefore, this paper addresses carry-trade returns from a risk-pricing perspective and examines if these returns can be connected to cross-country differences in risk pricing in the interest-rate market compared to the stock market. Data from Thomson Reuters Datastream and Federal Reserve Economic Data covering Australia, Japan, New Zealand, Switzerland and the United States were analyzed based on GMM estimation. The results indicate significant and persistent cross-country differences in risk aversion in the interest-rate market compared to the implied risk aversion in the stock market. This may offer opportunities for risk arbitrage and, therefore, a risk pricing-related explanation of carry-trade returns.

scholarly journals Economic Power Comparison between United States and China in the Context of Covid-19 Pandemic: Based on Statistical Methods

2021 ◽  
Vol 233 ◽  
pp. 01163
Author(s):  
Yutong Yang
Keyword(s):  
United States ◽  
Interest Rate ◽  
Production Capacity ◽  
The United States ◽  
Consumer Products ◽  
Power Comparison ◽  
Us Economy ◽  
Industrial Chain ◽  
Difficult Time ◽  
The Interest Rate

Generally speaking, economic crises are caused by insufficient demand, while the economic crisis that may be caused by the Covid-19 epidemic started with insufficient supply. In the case of insufficient demand, countries often use a series of monetary policies to release liquidity, such as interest rate cuts, RRR cuts. However, the interest rate cut this time may not work well. This is because the interest rate cut can increase the liquidity of the market.While controlling the epidemic, we should promptly resume work and production, and produce a variety of commodities that meet consumer demand. During this period of time, the main strategy is not monetary policy. Instead, appropriate fiscal policies should be used to reduce the burden on enterprises so that they can survive this difficult time without dying before they start their careers. Only companies that can survive the epidemic are good companies that have combat effectiveness and can continue to conquer the market after the epidemic is over.Therefore, in the face of the Covid-19 epidemic, the competition between China and the United States should not be a zero-sum game because the United States is the final consumer of a large number of products produced by China, and the United States is still the world’s leader. If the US economy declines, it will definitely affect global economic development. When necessary, we also need to support the production of high-end consumer products in the United States and allocate a portion of the production capacity for them. Only when the two sides have healthy competition can the industrial chain of both sides be upgraded together.

scholarly journals The Interest Rate Sensitivity of Investment

2019 ◽  
Vol 52 (2) ◽  
pp. 173-190
Author(s):  
Guido Baldi ◽  
Alexander Lange
Keyword(s):  
United States ◽  
Interest Rate ◽  
Rate Sensitivity ◽  
The United States ◽  
Jel Classification ◽  
Short Term ◽  
Vector Autoregressive ◽  
The Interest Rate ◽  
European Economies ◽  
Interest Rate Shock

Abstract The interest rate sensitivity of investment has often played an important role in macroeconomic models. However, many vector autoregressive (VAR) models do not include investment to the list of variables. In this paper, we empirically investigate the size and the evolution of the interest rate sensitivity of investment for the United States and the four largest European economies in the last few decades. We use a VAR model with four variables at quarterly frequency: real investment, real gross domestic product (GDP), inflation, and a measure of the short-term interest rate. In our VAR, the structural interest rate shock is identified under the assumption that macroeconomic quantities and inflation react to interest rate innovations with a lag. We test the appropriateness of this specification by comparing our approach with the identification of shocks derived from the changes in volatility approach. For the countries under consideration, we determine a date during either the 1980s or the 1990s where the interest rate sensitivity of investment began to decrease and became less responsive to monetary policy. In addition, we find that the interest rate sensitivity of investment has been higher in the United States than in Europe, particularly in the first subperiod. Zusammenfassung Die Zinssensitivität der Investitionen spielt oft eine große Rolle in theoretischen makroökonomischen Modellen. In dieser Studie untersuchen wir empirisch die Höhe und die zeitliche Änderung der Zinssensitivität der Investitionen für die Vereinigten Staaten und die vier größten europäischen Volkswirtschaften. Wir verwenden ein VAR-Modell mit vier Variablen: reale Investitionen, reales Bruttoinlandsprodukt, Inflation und kurzfristige Zinsen. In unserem VAR identifizieren wir den strukturellen Schock unter der Annahme, dass die realen makroökonomischen Variablen verzögert auf einen Zinsschock reagieren. Wir testen die Angemessenheit dieser Spezifikation, indem wir unsere Vorgehensweise mit der Identifikation durch den “changes in volatility approach” vergleichen. Wir finden heraus, dass entweder in den 1980er oder frühen 1990er Jahren ein Strukturbruch stattgefunden und sich die Zinssensitivität der Investitionen verringert hat. Interessanterweise zeigen unsere Resultate zudem, dass die Zinssensitivität der Investitionen in den Vereinigten Staaten höher gewesen ist als in den untersuchten europäischen Ländern – insbesondere bis in die 1980er Jahre. JEL Classification: E22, E43, E52

Interest Rate Controls: The United States in the 1940s

1992 ◽  
Vol 52 (3) ◽  
pp. 631-650 ◽  
Author(s):  
Mark Toma
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Rational Expectations ◽  
The United States ◽  
Treasury Bills ◽  
Government Bonds ◽  
Market Rate ◽  
Long Run ◽  
The Interest Rate

In 1942 the U.S. Treasury and the Federal Reserve agreed to keep the interest rate on long-term government bonds below a ceiling of 2.5 percent. Assuming rational expectations, the ceiling on long-term interest rates can be viewed as a government commitment to low long-run inflation. The Fed also agreed to buy and sell short-term government bonds at a below-market rate of 3/8 percent. This policy did not result in long-run inflation because it was narrowly confined to 3-month Treasury bills.

INEQUALITY, INCENTIVES, AND OPPORTUNITY

2002 ◽  
Vol 19 (1) ◽  
pp. 84-109 ◽  
Author(s):  
Donald R. Deere ◽  
Finis Welch
Keyword(s):  
Low Income ◽  
Stock Prices ◽  
Married Couples ◽  
The United States ◽  
Labor Income ◽  
Home Equity ◽  
Hours Worked ◽  
Race And Gender ◽  
Wage Rates ◽  
And Gender

Measured inequality has increased tremendously between the 1960s and 1990s, not only in the United States but throughout the majority of industrial nations. Wages among people of the same race and gender have become less equal. The hours worked by men have fallen, and the drop has been more pronounced among those who earn lower wages—as a result, inequality in labor income, which is the product of the wage rate and hours worked, has increased relative to inequality in wage rates. Moreover, among married couples, employment of the wives of high-income men has increased until these wives are approximately as likely to be employed outside the home as are the wives of low-income men, who have always worked for wages. In addition, due to assortative mating, wage rates of husbands and wives are positively correlated, and it is clear that the growth in inequality of labor incomes among families has outstripped the growth in inequality in individual labor income. Finally, only the highest-income families have savings in excess of home equity and company-sponsored pensions, which implies that inequality in wealth among families has been exacerbated by the growth in stock prices.

Sign in / Sign up

Export Citation Format

Share Document