Introduction to Mortgages and Mortgage Backed Securities
Resources
Description
Key Features
- Written for buyers of real estate, not mortgage lenders
- Balances theory with increasingly complex practices of commercial and residential mortgage lending
- Emphasizes international practices, changes caused by the 2008-11 financial crisis, and the behavioral aspects of mortgage decision making
Readership
Upper-division undergraduates and graduate students studying real estate finance and capital markets. Common course titles include "Mortgages and Mortgage-Backed Securities and Markets," "Real Estate Analysis," and "Investment Property Analysis."
Table of Contents
Contributors and Acknowledgments
Chapter 1. A Brief History of Mortgages
Abstract
The Great Depression, the New Deal, and the Transformation of the American Mortgage Market
The Post World War II Era
References
Chapter 2. Mortgage Originations and the Mortgage Chain
Abstract
Loan Origination
Funding
The Securitization Process
Investors
Servicing
A Summary: The Mortgage Chain
References
Chapter 3. The Work-Horse American Mortgage: The 30-Year Fixed-Rate Mortgage
Abstract
The Popularity of the 30-Year Fixed-Rate Mortgage
Reference
Chapter 4. Other Types of Mortgages
Abstract
Interest-Only Mortgages
Pay Option ARMS, PLAMS, and Other Negative Amortization Mortgages
Exotic Mortgages
Second Lien Mortgages
References
Chapter 5. Underwriting Mortgages and Mortgage Default
Abstract
Introduction
Underwriting Criteria
Automated Valuation Methods
Putting it Together
References
Chapter 6. Mortgage-Backed Securities and Derivatives
Abstract
Types of Tranches
Chapter 7. Multifamily Mortgages
Abstract
Property-Based Underwriting Standards
Underwriting the Borrower
Commercial Loan Covenants
Sources of Multifamily Finance
The 5–50 Problem
Section 42 Low Income Housing Tax Credit Program
Modeling the Cost of Default for a Multifamily Property
References
Chapter 8. International Comparisons of Mortgages
Abstract
Tax Treatment of Mortgages
Sources of Funding
Differences in Government Intervention in Mortgages
How Consumer-Friendly Is the US Mortgage?
Size of Mortgage Markets
Mortgages and Macro-Prudential Supervision
References
Chapter 9. The Subprime Crisis
Abstract
Those Who Saw it Coming
Those Who Said House Prices Would Rise Forever
Ex Post Views on Causes of the Financial Crisis
Securitization
Rating Agencies
Models
Supply Chain
References
Chapter 10. Consumers in Mortgage Markets
Abstract
Economic Models of Mortgage Loan Choice
Prepayment and Default Decisions
Consumer Knowledge and Mortgage Decisions
Behavioral Decision-Making Perspectives and Mortgage Borrowers
External Influences on Mortgage Decisions
The Home Purchase Decision
Consumer Protection in Mortgage Markets
Conclusion: What’s the Optimal Mortgage for a Borrower?
References
Chapter 11. The Yield Curve, Monte Carlo Methods, and the Option-Adjusted Spread
Abstract
Interest Rate Models
Monte Carlo Methods
Controversy
References
Chapter 12. A Brief Discussion of Duration and Convexity
Abstract
Introduction
Problems Created by Duration-Convexity
Methods for Managing Mortgage Interest Rate Risk
Option Adjusted Spread
How Investors Think They Can Make Money Using Convexity
References
Chapter 13. The Rise and Fall of Fannie Mae and Freddie Mac: Lessons Learned and Options for Reform
Abstract
Introduction
How Fannie Mae and Freddie Mac Support the Mortgage Market
A Brief History of Fannie Mae and Freddie Mac
The Benefits of the GSE Model
Inherent Weaknesses and Criticisms of the GSE Approach
Principles for Reform
Alternative Models
Conclusions
References
Index
Product details
- No. of pages: 256
- Language: English
- Copyright: © Academic Press 2013
- Published: November 1, 2013
- Imprint: Academic Press
- eBook ISBN: 9780124045934
About the Author
Richard Green
Affiliations and Expertise
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