Race, redlining, and residential mortgage loan performance

1994 ◽  
Vol 9 (3) ◽  
pp. 263-294 ◽  
Author(s):  
James A. Berkovec ◽  
Glenn B. Canner ◽  
Stuart A. Gabriel ◽  
Timothy H. Hannan
Keyword(s):  
Mortgage Loan ◽  
Residential Mortgage

scholarly journals Malaysian residential mortgage loan default: a micro-level analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Azira Abdul Adzis ◽  
Hock Eam Lim ◽  
Siew Goh Yeok ◽  
Asish Saha
Keyword(s):  
Financial Institutions ◽  
Mortgage Loan ◽  
Mortgage Loans ◽  
Loan Default ◽  
Content Type ◽  
Future Studies ◽  
Residential Mortgage ◽  
The Government ◽  
The Individual ◽  
Lending Institutions

PurposeThis study investigates factors contributing to residential mortgage loans default by utilizing a unique dataset of borrowers' default data from one of the pioneer lending institutions in Malaysia that provides home financing to the public. Studies on mortgage loan default have been extensively examined, but limited studies utilize the individual borrower's data, as financial institutions generally hesitant to reveal their customers' data due to confidentiality issue.Design/methodology/approachThis study uses logistic regression model to analyze 47,158 housing loan borrowers' data for the year 2016.FindingsThe findings suggest that male borrowers, Malay and other type of ethnicity, guarantor availability, loan original balance, loan tenure, loan interest rate and loan-to-value (LTV) ratio are the significant factors that influence mortgage loans default in Malaysia.Research limitations/implicationsFuture studies may expand the sample by employing data from other types of financial institutions that would give greater insights as findings might vary due to differences in objectives, functions and regulations. In addition, the findings are subjected to the censoring bias where future studies could perform the survival analysis to control for censoring bias and re-validating the findings of the present study.Practical implicationsThe findings provide valuable insights for lending institutions and the government to formulate housing loan policy in Malaysia.Originality/valueTo the best of the authors' knowledge, this is the first study in the context of emerging economies that uses financial institution's internal data to investigate factors of mortgage loan default.

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.

Analyzing the Causal Relationships Between Financial Crises and the Residential Mortgage Market

2021 ◽  
Vol 27 (8) ◽  
pp. 1773-1789
Author(s):  
Larisa I. YUZVOVICH ◽  
Mariya V. SHARAFIEVA
Keyword(s):  
Interest Rates ◽  
Financial Crises ◽  
Banking Sector ◽  
Recovery Period ◽  
Mortgage Lending ◽  
Mortgage Market ◽  
Mortgage Loan ◽  
Causal Relationships ◽  
Active Growth ◽  
Residential Mortgage

Subject. We consider the economic relations, arising in the process of the analysis of the financial and economic state of the housing (mortgage) loan market during crises. Objectives. The aim is to conduct a study within the practical concept of financial crises and the residential mortgage market, to identify cause-effect relationships. Methods. We apply analytical and expert methods, based on the analysis of residential mortgage market data and the activities of the Agency for Housing Mortgage Lending. Results. The study determines the segmented role of digitalization of the banking sector in the system of State programs intended to support the residential mortgage market. We reveal causal relationships between financial crises and the residential mortgage market on the basis of a factor analysis. Conclusions. During 2008 and 2014, the government regulation of the banking crisis was only through changing the level of the key rate. It resulted in an increase in interest rates and a decrease in demand for mortgage loans, as affordable mortgage interest rates still remain the main driver of mortgage lending for citizens. This scenario gives rise to a stagnation of the residential mortgage lending market and, consequently, a very long recovery period. In contrast to the scenario of 2020, where we see an active growth in mortgage lending against the background of the financial crisis, the reason was the implemented set of measures that triggered the growth and formed a safety cushion for the banking sector in the form of secured lending.

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