scholarly journals Cause Determination of the Adjustable-Rate Mortgage Market Collapse During the Financial Crisis

2020 ◽  
Vol 12 (11) ◽  
pp. 83
Author(s):  
Ryan P. Wang
Keyword(s):  
Financial Crisis ◽  
Mortgage Market ◽  
Percentage Increase ◽  
Predatory Lending ◽  
Key Factors ◽  
Popular Narrative ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
The Impact

This paper provides insight into what caused the decline of the adjustable-rate mortgage (ARM) market during the 2007–2009 financial crisis. Contrary to common perception, the failure of the ARM market cannot be primarily attributed to predatory lending targeting subprime borrowers from low-credit households. This popular narrative is incomplete and disregards some important factors. I present three key factors that challenge the narrative and point to previously undiscussed sources that may have contributed to the ARM market collapse. First, the accusation of predatory lending does not account for other possible causes of mass ARM defaults. Second, the sole focus on the market’s subprime segment disregards the impact of prime ARMs on the market. Third, the narrative’s citation of subprime ARMs having greater delinquency rates and foreclosure numbers fails to recognize the significant percentage increase in prime ARM failures in the years leading up to the crisis, as well the disparity in typical outstanding balances between subprime and prime ARMs.

Human Capital of the Enterprise in the Context of System Economy

2020 ◽  
pp. 24-38
Author(s):  
Dmitry A. Zhdanov
Keyword(s):  
Human Capital ◽  
Sustainable Growth ◽  
Key Factors ◽  
The Status ◽  
Environmental Process ◽  
Ongoing Development ◽  
The Stability ◽  
The Impact ◽  
A Company

One of the key factors that determine the success of the company and ensure its ongoing development, adaptation to the requirements of the digital economy, is the human capital (HC) of the enterprise. In this regard, the purpose of the study is designated as identifying ways to support the integral and sustainable growth of a company based on the development of its human capital. Since an enterprise is an open socio-economic system, the methodological basis of the work is the systems economic theory, which made it possible to present the company's activities as the interaction of object, environmental, process and project systems. Based on this concept and taking into account the objectives traditionally pursued by the company, four basic functional complexes have been identified that ensure the stability and reproductive capabilities of the enterprise, the challenges that need to be overcome within such capabilities were identified, the requirements for the knowledge, skills and abilities of personnel were established. Comparison of the human resources of the enterprise and the features of the corporate tasks solved with their help made it possible to group the elements of the company's HC in a new way – depending on the impact on the noted basic subsystems that determine the integrity of the company. This systematization demonstrated the interconnection of individual elements of the enterprise's HC and the performance of the corresponding complexes. Thus, the probable personnel reasons for the lag in certain areas of the company's activity and the possibilities of their reorganization by targeted impact on the required elements of the HC were identified. Since the implementation of the proposed approach requires the determination of the status of the corporate HC, and the reliability of such a procedure traditionally raises criticism due to the objective difficulties of measurement, the article proposes a methodology to streamline the process of assessing the state of the parameters under study. The methodology is based on the ranking of HC indicators depending on the accuracy of displaying the parameters of the object. The proposed approach made it possible to determine the tools for monitoring the selected categories of human capital, ways to step them up and remedy the situation.

scholarly journals The Home Mortgage Disclosure Act And Subprime Lending

2010 ◽  
Vol 26 (5) ◽  
Author(s):  
Rakesh K. Gupta ◽  
Hari Sharma ◽  
Cheryl E. Mitchem
Keyword(s):  
Mortgage Lending ◽  
Predatory Lending ◽  
Subprime Lending ◽  
Fixed Rate ◽  
Mortgage Industry ◽  
Reporting Requirements ◽  
Home Mortgage Disclosure Act ◽  
Adjustable Rate Mortgage ◽  
Home Mortgage ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: black; font-size: 10pt; mso-themecolor: text1;"><span style="font-family: Times New Roman;">This research paper focuses on the analysis of subprime lending activities in specific geographic area in the light of reporting requirements of the Home Mortgage Disclosure Act (HMDA). This cross sectional study has focused on the detailed analysis of mortgage data for the selected Metropolitan Statistical Areas (MSA) from a socio-economic perspective. The objective of this research is to assess the impact of predatory lending in selected geographic regions. Another dimension of the research focuses on the role of mortgage lending from a securitization point of view. The study reveals that private securitization (PSEC) mortgages grew dramatically not only by the number of loans but also significantly by the dollar amount due to subprime lending activities during the period of study. The growth in PSEC loans affected mortgage lending in several ways, such as, increasing subprime lending, boosting home prices, and undermining mortgage industry regulations. Additionally, Government-Sponsored Enterprises (GSEs) loan originations also increased the number of subprime loans because of relaxed reporting requirements which contributed to increased delinquencies and foreclosures for conforming loans. The study further reveals that HMDA reporting requirements allowed the mortgage industry to conceal the loans that had spreads above the prime rate of up to 3.5 points for Fixed Rate Mortgage or 5 points for Adjustable Rate Mortgage (ARM). The study of mortgage lending programs, products, and regulatory laws have also been examined to assess the impact of predatory lending on homeownership. </span></span></p>

scholarly journals The impact of inflation on the cost of adjustable-rate mortgages

2018 ◽  
Vol 3 (4) ◽  
pp. 113-134
Author(s):  
Tomasz Musiałowski
Keyword(s):  
Inflation Rate ◽  
Mortgage Loan ◽  
Strong Positive Correlation ◽  
The Real ◽  
Real Cost ◽  
National Bank ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
The Cost ◽  
The Impact

Aim: To assess how inflation affects the cost of adjustable-rate mortgage from the perspective of personal finances.Design / Research methods: Adjustable-Rate Mortgage simulations were carried out, showing both the nominal and real costs of a mortgage loan. The behavior and the relationship between the inflation rate and WIBOR 3M rate were compared.Conclusions / findings: The analysis shows that the real cost of mortgage decreases with an increase in inflation. During the period under review, inflation declined, reducing both the real and nominal cost of the loan. There was a strong positive correlation between the WIBOR 3M rate and the inflation rate. Equally strong, although a negative correlation was observed between the inflation rate and the real interest rate. With the decline in inflation, real mortgage rates increased, and vice versa. Particular attention was paid to the periods in which inflation was rising. WIBOR 3M rate reacted to this increase to a much lesser extent and with a lag compared to the inflation rate.Originality / value of the article: Considering that forecasts presented by the National Bank of Poland predict inflation growth in the coming years, a thorough examination of the inflation impact on the mortgage costs is an important issue for risk management in households with mortgage.

Financial System Stability and Market Confidence

2010 ◽  
Vol 9 (1) ◽  
pp. 25-47 ◽  
Author(s):  
Kiyohiko G. Nishimura
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial System ◽  
The United States ◽  
Mortgage Market ◽  
System Stability ◽  
Key Factors ◽  
Safety Nets ◽  
Catastrophe Insurance ◽  
Contingent Capital

This paper first explains why the financial crisis of 2007–08 started in the United States, in particular, in the sub-prime mortgage market, a periphery of their financial markets. Agency problems in complex securitization and investors' “responsibility avoidance” behavior are argued to be key factors in the sub-prime mortgage meltdown. It then examines the collapse of global financial markets and the erosion of market confidence that followed, and measures taken by governments and central banks to save the financial system. Finally, the paper explores possible safety nets that may prevent another financial crisis: private-sector capital insurance, public–private partnership capital insurance (a version of catastrophe insurance), and contingent capital.

Determination of Optimal Leadership Styles Through Knowledge Management: A Case from the Automotive Industry

2021 ◽  
pp. 2150012
Author(s):  
Mohammad Hakkak ◽  
Khaled Nawaser ◽  
Ali Vafaei-Zadeh ◽  
Haniruzila Hanifah
Keyword(s):  
Knowledge Management ◽  
Leadership Styles ◽  
Leadership Style ◽  
Success Factors ◽  
Key Factors ◽  
Statistical Population ◽  
Transformational Leadership Style ◽  
The Impact

This study proposed a model to examine the impact of various leadership styles on knowledge management. This case study identified the best leadership style, which can affect the key factors of the knowledge management success. The statistical population was composed of all staff of the Pars Khodro Company headquarters in Iran, in which 226 people were accordingly chosen as the sample. The required data for examining research hypotheses were also collected using questionnaire. Results revealed the impact of leadership styles on knowledge management. The transformational leadership style was consequently found to have a positive and significant impact on the knowledge management key success factors, in contrast with other leadership styles including self-management, pragmatic, conservative and structure-based.

Secular stagnation in the modern world

2018 ◽  
pp. 125-141 ◽  
Author(s):  
S. M. Drobyshevsky ◽  
P. V. Trunin ◽  
A. V. Bozhechkova
Keyword(s):  
Public Debt ◽  
Capital Accumulation ◽  
Technological Development ◽  
Japanese Economy ◽  
Modern World ◽  
Key Factors ◽  
Destruction Process ◽  
Secular Stagnation ◽  
The Impact

The paper studies the factors of secular stagnation. Key factors of long-term slowdown in economic growth include the slowdown of technological development, aging population, human capital accumulation limits, high public debt, creative destruction process violation etc. The authors analyze key theoretical aspects of long-term stagnation and study the impact of these factors on Japanies economy. The authors conclude that most of the factors have significant influence on the Japanese economy for recent decades, but they cannot explain all dynamics. For Russia, on the contrary, we do not see any grounds for considering the decline in the economy since 2013 as an episode of secular stagnation.

The Determinants of Merger Withdrawals’ Abnormal Returns in The Australian Market

2015 ◽  
pp. 89-110 ◽  
Author(s):  
Thuy Nguyen Thu ◽  
Giang Dao Thi Thu ◽  
Hoang Truong Huy
Keyword(s):  
Financial Crisis ◽  
Event Study ◽  
Abnormal Returns ◽  
Market Response ◽  
Crisis Period ◽  
Valuation Effects ◽  
Event Study Method ◽  
Private And Public ◽  
Method Of Payment ◽  
The Impact

This paper examines the abnormal returns in merger withdrawals in Australia, especially distinguishing the market response between private and public targets. We also study the determinants of those abnormal returns, including the method of payment and the impact of financial crisis periods. Using the event study method, we document that in the Australian context, the announced withdrawal of mergers involving private targets creates significantly negative valuation effects in comparison with the valuation effects in withdrawal of mergers involving public targets. We also find that a financial crisis period strongly affects abnormal returns of merger withdrawals. However, the method of payment does not have any impact on the abnormal returns.

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