Download PDF by Charles W. Calomiris: High Loan-to-Value Mortgage Lending: Problem or Cure? (Aei

By Charles W. Calomiris

ISBN-10: 0844771252

ISBN-13: 9780844771250

The authors weigh the features of this undefined, its practices and rules, and the altering nature of the shopper finance industry to figure out even if restricting such lending might serve the general public curiosity.

Show description

Read Online or Download High Loan-to-Value Mortgage Lending: Problem or Cure? (Aei Studies on Financial Market Deregulation) PDF

Similar real estate books

Download e-book for kindle: Inside Unreal Estate: A Journey Through India's Most by Sushil Kumar Sayal

A candid tell-all story of India’s such a lot debated sector

Starting off as a trainee engineer, Sushil Kumar Sayal was resolute to be a hit in actual property, at a time whilst it used to be considered as an unscrupulous occupation. He has due to the fact labored with businesses like Mahindra Gesco, DLF and Alpha G, and has performed an important position in setting up the true property Asset administration (REAM) version within the nation. In his fast paced memoir are many anecdotes of dodgy developers, maverick traders and corrupt bureaucrats.

Download e-book for iPad: Real Estate Finance and Investment Manual by Jack Cummings

Up-to-date and revised to incorporate ten years of latest advancements in actual property funding, actual property Finance and funding guide, 9th version is the definitive advisor to financing for all actual property traders. comprehend the entire financing recommendations, how one can opt for a suitable method, examine insider strategies, and get hands-on event with case reports and important checklists.

Read e-book online The Global Property Investor's Toolkit: A Sourcebook for PDF

How actual property traders and speculators can take their enterprise globalThe actual property growth has long past worldwide, and people winning traders who are looking to sustain their gains are commencing to examine rising markets on different continents. Markets in South the US, jap Europe, India, and Asia are at the moment experiencing the speedy development that mature household markets skilled many years in the past.

Additional info for High Loan-to-Value Mortgage Lending: Problem or Cure? (Aei Studies on Financial Market Deregulation)

Example text

Prepayment risk tends to be lower for HLTV mortgage loans than for conforming A credits. Jeff Moore, president, Mego Mortgage (Atlanta), maintains that ‘‘because the borrower ends up with a loan-to-value on the property in excess of 100 percent, they usually stay in the loan for some time because they can’t quickly refinance out and they still have relatively high debt ratios’’ (Hewitt 1997, 177). Investors have been satisfied with the general performance of HLTV loan securitizations largely because the model risk has been treated rather conservatively and credit enhancements protecting asset-backed securities holders have consequently been more than adequate.

To demonstrate expected performance for its first securitizations—which were also the first HLTV loans ever securitized—FirstPlus relied extensively on Title I performance data. According to Dan Phillips, chief executive officer of FirstPlus, ‘‘that’s how we got the rating agencies to rate the loans, and the insurers to insure them’’ (Timmons 1996). Investors and underwriters have far more performance data with HLTVs now than in late 1994, when Phillips’s first securitization went to market, but performance expectations are still treated gingerly by rating agencies since longterm behavior is relatively unknown (Fitch IBCA 1998b, 6).

HLTV lenders charge lower interest rates on their credits, as noted, because they believe that linking debt to the consumer’s home discourages voluntary default. Credit card loans do not enjoy that same protection. Some skeptics maintain that HLTV borrowers start out looking sound but are prone to subprime default characteristics later because of poor credit habits and the high LTV leverage. Although the HLTV market has not yet been tested through a cyclical downturn, this assessment is questionable.

Download PDF sample

High Loan-to-Value Mortgage Lending: Problem or Cure? (Aei Studies on Financial Market Deregulation) by Charles W. Calomiris


by Mark
4.5

Rated 4.84 of 5 – based on 36 votes