Get Cash to More Families that Need It Now: Give Banks More Discretion to Make Home Equity Loans and Refinance Mortgages

2020 ◽  
Author(s):  
Kevin Erdmann
Keyword(s):  
Home Equity ◽  
Home Equity Loans

scholarly journals Feature Selection to Optimize Credit Banking Risk Evaluation Decisions for the Example of Home Equity Loans

Mathematics ◽  
2020 ◽  
Vol 8 (11) ◽  
pp. 1971
Author(s):  
Agustin Pérez-Martín ◽  
Agustin Pérez-Torregrosa ◽  
Alejandro Rabasa ◽  
Marta Vaca
Keyword(s):  
Feature Selection ◽  
Financial Institutions ◽  
Credit Scoring ◽  
Feature Selection Method ◽  
Capital Allocation ◽  
Risk Level ◽  
Home Equity ◽  
Home Equity Loans ◽  
The Mean ◽  
Basel Agreement

Measuring credit risk is essential for financial institutions because there is a high risk level associated with incorrect credit decisions. The Basel II agreement recommended the use of advanced credit scoring methods in order to improve the efficiency of capital allocation. The latest Basel agreement (Basel III) states that the requirements for reserves based on risk have increased. Financial institutions currently have exhaustive datasets regarding their operations; this is a problem that can be addressed by applying a good feature selection method combined with big data techniques for data management. A comparative study of selection techniques is conducted in this work to find the selector that reduces the mean square error and requires the least execution time.

Home Equity Lending and Retail Spending: Evidence from a Natural Experiment in Texas

2012 ◽  
Vol 4 (4) ◽  
pp. 94-125 ◽  
Author(s):  
Chadi S Abdallah ◽  
William D Lastrapes
Keyword(s):  
Natural Experiment ◽  
Credit Constraints ◽  
Constitutional Amendment ◽  
Aggregate Level ◽  
Home Equity ◽  
Credit Constraint ◽  
Household Level ◽  
Credit Availability ◽  
Level Data ◽  
Home Equity Loans

We estimate how spending in Texas responded to a 1997 constitutional amendment that relaxed severe restrictions on home equity lending. We use this event as a natural experiment to estimate the importance of credit constraints. If households are credit-constrained, such an increase in credit availability will increase their spending. We find that Texas retail sales at the county and state levels increased significantly after the amendment, lending support to the credit-constraint hypothesis. We confirm these findings and refine our interpretation of the estimated aggregate-level responses using household-level data on home equity loans. (JEL D14, E21, G21, G28)

Stress Tests, Entrepreneurship, and Innovation

2021 ◽  
Author(s):  
Sebastian Doerr
Keyword(s):  
Stress Tests ◽  
Home Equity ◽  
Negative Effects ◽  
Equity Financing ◽  
Young Firms ◽  
Unique Data ◽  
Home Equity Loans ◽  
Patent Applications ◽  
Small Business Loans ◽  
Relative Decline

Abstract This paper shows that post-crisis stress tests have negative effects on entrepreneurship and innovation at young firms. Exploiting unique data on business-related home equity loans in HMDA, I show that stress tested banks strongly cut small business loans secured by home equity, an important source of financing for entrepreneurs. Lower credit supply leads to a relative decline in entrepreneurship in counties with higher exposure to stress tested banks. The decline is stronger in sectors with a higher share of young firms using home equity financing, i.e., in which the reduction in credit hits hardest. More-exposed counties also see a decline in young firms' patent applications as well as labor productivity, reflecting young firms' disproportionate contribution to growth.

Securing Debt in an Insecure World

Debtor Nation ◽  
2011 ◽  
Author(s):  
Louis Hyman
Keyword(s):  
Financial Institutions ◽  
Credit Cards ◽  
Home Equity ◽  
Home Equity Loans ◽  
Commercial Loans

This chapter explores how profits on credit cards became the center of lending. By the early 1980s, credit cards metamorphosed from break-even investments to leading earners. With much higher profits than commercial loans, financial institutions began to lend as much money as they could to consumers on credit cards. By the early 1990s, investments in credit cards were twice as profitable as conventional business loans. Increasingly, the now plentiful credit cards allowed consumers to borrow more money and with greater flexibility than they had before. For home owners, home equity loans also offered a new way to borrow by tapping into the value of their homes. Like credit cards, home equity loans allowed borrowers to pay back their debt when they wanted, without a fixed schedule.

Sign in / Sign up

Export Citation Format

Share Document