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In the first chapter, I study the effects of innovations in information technology on the housing market. Specifically, I focus on the improved ability of lenders to assess the credit risk of home buyers, which has become possible with the emergence of automated underwriting systems in the United States in the mid-1990s. I develop a standard life-cycle model with incomplete markets and idiosyncratic income uncertainty. I explicitly model the housing tenure choice of the households: rent/purchase decision for renters and stay/sell/default decision for homeowners. Risk-free lenders offer mortgage contracts to prospective home buyers and the terms of these contracts depend on the observable characteristics of households. Households are born as either good credit risk types--having a high time discount factor--or bad types--having a low time discount factor. The type of the household is the only source of asymmetric information between households and lenders. I find that as lenders have better information about the type of households, the average down payment fraction decreases together with an increase in the average mortgage premium, the foreclosure rate, and the dispersions of mortgage interest rates and down payment fractions, which are consistent with the trends in the housing market in the last 15 years. From a welfare perspective, I find that better information, on average, makes households better off. In the second chapter, I focus on the labor market behavior of couples. Search theory routinely assumes that decisions about the acceptance/rejection of job offers (and, hence, about labor market movements between jobs or across employment states) are made by individuals acting in isolation. In reality, the vast majority of workers are somewhat tied to their partners--in couples and families--and decisions are made jointly. This chapter studies, from a theoretical viewpoint, the joint job-search and location problem of a household formed by a couple (e.g., husband and wife) who perfectly pool income. The objective of the exercise, very much in the spirit of standard search theory, is to characterize the reservation wage behavior of the couple and compare it to the single-agent search model in order to understand the ramifications of partnerships for individual labor market outcomes and wage dynamics. We focus on two main cases. First, when couples are risk averse and pool income, joint-search yields new opportunities--similar to on-the job search--relative to the single-agent search. Second, when couples face offers from multiple locations and a cost of living apart, joint-search features new frictions and can lead to significantly worse outcomes than single-agent search. Finally, in the third chapter, I focus on the relation between house prices and interest rates. Although interest rates and housing prices seem mostly to have a negative relation in the data, the relation does not seem to be stable. For example, the recent run up in the global housing prices is generally explained by globally low interest rates. On the other hand, there have been periods where housing prices and interest rates moved together. Motivated by these observations, I formulate a two period OLG model to find out the form of the relationship between interest rates and housing prices. It appears that the distribution of homeownership is also important for housing price dynamics. I show that housing prices in the equilibrium do not always have a negative relation with interest rates. / text

Aging problem is continually increasing and fertility rates are declining in Hong Kong. The Government of the Hong Kong Special Administrative Region (“The HKSAR Government”) concerns on the long-term care for elderly people. To compare with other developed countries, the retirement protection for elderly people in Hong Kong needs more comprehensive improvement on long-term care expenses. Actually, not many appropriate options of long-term care expenses are seemed available in Hong Kong. Revere mortgage (“RM”) is a way to unlock home equity into regular cash flows without moving out of the house. Reverse mortgage is an emergency financial tool in Hong Kong. The rationale of reverse mortgage is to help the elderly homeowners to convert housing equity to improve their living standard in retirement. Although the Mandatory Provident Fund (“MPF”) was launched in Hong Kong since 2000 and has been operating for more than 10 years, the overall performance of the MPF is less than general expectation of participants that have negative impacts on their retirement plan. The majority of Hong Kong people including the elderly homeowners may not enjoy sufficient protection from MPF after retirement. Similar reverse mortgage programmes have been practicing in the United States, Great Britain, Australia, India, Korea, Japan and Singapore. In contrast, reverse mortgage market is newly growth in Hong Kong. On the other hand, reverse mortgage programmes are tried out in Singapore, India and Korea. In the research, experience of those countries can provide comprehensive and valuable information for references in order to understand more the benefits and drawbacks of reverse mortgage to Hong Kong. Therefore, this dissertation is conducted in several perspectives in Hong Kong in order to show the feasibility of reverse mortgage programme in Hong Kong. It is worth to study whether reverse mortgage could become long-term care expenses for the upper-class housing elderly homeowners, whose residential property has high market value, in Hong Kong. In the dissertation, it is showed that the potential applicants have expectation on reverse mortgage assisting them to overcome their financial burden in the long-term care. The majority of housing values in Hong Kong are adopted to refinance for the upper-class housing elderly homeowners after their retirement. Furthermore, examination of the alternative housing options is whether to be considered for the upper-class housing elderly homeowners. On the other hands, risks and benefits of potential providers of reverse mortgage programme are examined in the dissertation. Further studies on the HKSAR Government in relation to social responsibility, financial issues and regulation issues are conducted. Based on this analysis from different views and aspects, the dissertation is tried to study the feasibility of reverse mortgage whether become long-term care expenses for the upper-class housing elderly homeowners. In addition, it is to understand not only reverse mortgage can whether overcome financial burden for the upper-class housing elderly homeowners, but also understand the perspectives of society, banks and government on reverse mortgage. / published_or_final_version / Housing Management / Master / Master of Housing Management

The population of Hong Kong is getting aged which causes a number of social problem and increasing government expenses. These include decline of workforce, increase demand in health care & social facilities. For individual elderly, the longer life expectancy implied an increasing retirement life and subsequent expenditures. One of the ways to solve the problem is reverse mortgage. It is a financial scheme that helps liquidate the home asset of the elderly homeowner in return of a stable cash stream; by using the self-occupied home as collateral while the elderly are still allowed to line in this home. The objective of this study aims at evaluation the performance of the Hong Kong Reverse Mortgage scheme on improving the standard of living of elderly. The quality of life was adopted as object of value of the standard of living while four dimensions: Life Satisfaction, Self-Esteem, General Health Care & Functional Status and Socioeconomic Status were adopted for measuring quality of life of the elderly. A questionnaire survey was conducted to obtain the opinion on the Hong Kong Reverse Mortgage Scheme. As a whole, the respondents provide a positive feedback and tend to agreed that the Hong Kong Reverse Mortgage scheme help improving the standard of living. In addition, respondents were found particular positive towards the special feature of the Hong Kong Reverse Mortgage scheme: the flexible bequest arrangement and the deferred payment arrangement. Moreover, it was also observed that Tenure Choice was negatively associated with the Age of respondents while the evaluation of effectiveness of the scheme was positively associated with the income change after engaged in the Hong Kong Reverse Mortgage scheme. In depth interviews were also conducted to obtain the opinions of other persons that closely related the Hong Kong Reverse Mortgage scheme. Result suggested that the first reverse mortgage product in Hong Kong is on the right track and more effort should be spend to promote the scheme to the local elderly homeowners. The direction of future study may include other object of values and the corresponding measurement dimensions. / published_or_final_version / Housing Management / Master / Master of Housing Management

published_or_final_version / Urban Design / Master / Master of Urban Design

The borrowers in the mortgage market consist of both households and companies. Themain source for financing a property weather it is a private property or a real estateproperty is a mortgage. When granting a mortgage the bank incurs a risk. It is importantfor banks to minimise the risk since an unstable market can affect not only the bank andits customers but society as a whole. This thesis concerns the credit granting processand the difference in credit granting for households and companies and if there is aneed of a difference between the processes.The research method used for this report is a deductive approach with qualitativeresearch performed through in-depth, face-to-face interviews. As the number of banksin question is small we have used a case study approach which is suitable as focus lies onthe processes rather than the outcome of credit granting.The assessment of creditworthiness and repayment ability is the most important factorsof the credit granting processes for both parts of the market. There are differencesbetween the credit granting processes between the different parts of the market. Whenassessing the creditworthiness and repayment ability of a company there are moreparameters to evaluate. The mortgage amount for a real estate is greater than the one ofa private property and the private part of the market is regulated to a greater extent. Thefocus on the private part of the market is consumer protection and on the corporatepart the banks credit risk. Differences between the processes are needed for the bank tobe able to assess the creditworthiness and repayment ability for both households andcompanies in debt to decrease their credit risk. / Låntagarna på bostadsfinansieringsmarknaden består av både privatpersoner ochföretag. Bostäder finansieras oftast av banker oavsett om det är ett privat bostadsköpeller ett fastighetsköp. När banker beviljar ett lån utsätts de för en risk. Det är viktigt förbankerna att minimera kreditrisker eftersom en ostabil marknad kan påverka inte barabanken och dess kunder utan även samhället. Denna kandidatuppsats handlar omkreditgivningsprocessen och dess skillnader mellan privatpersoner och företag och omdet behövs en skillnad.Forskningsmetoden vi använt oss är en deduktiv ansats, men kvalitativa undersökningargjorda genom djupgående, personliga intervjuer. Eftersom det enbart var ett fåtal bankermed i underökningen valde vi att använda oss av en fallstudie, det var passande då fokusligger på kreditgivningsprocessen och inte utkomsten av densamma.Bedömningen av en kunds kreditvärdighet och återbetalningsförmåga är grunden förkreditgivningsprocessen för båda delarna av marknaden. Det finns skillnader mellankreditgivningsprocessen mellan privatpersoner och företag. När kreditvärdigheten ochåterbetalningsförmågan bedöms för ett företag är det fler parametrar som måstebedömas. Ett fastighetslån uppgår ofta till ett högre värde än ett bostadslån ochprivatsidan är till en större del styrd av lagar. Fokuset på privatsidan ligger påkonsumentskydd medans företagssidan är mer inriktad på bankens minimering avkreditrisk. Skillnaderna i processerna är nödvändiga på grund utav att banken måstekunna bedöma kreditvärdigheten och återbetalningsförmågan ordentligt för attminimera sin kreditrisk.

Sparčiai vystantis kreditavimo santykiams, taip pat bankams bei kitoms kredito įstaigoms aktyviai plečiant įvairialypio finansavimo politiką, neišvengiamai susiduriama su efektyvių prievolių įvykdymo užtikrinimo būdų ieškojimu. Tačiau šiuo ekonominiu laikotarpiu ypatingai kreipiamas dėmesys ne tik į patikimiausius bei efektyviausius prievolių įvykdymo užtikrinimo būdus, bet ir į procedūras, taikomas išieškant iš įkeisto turto. Būtent šio darbo objektas yra išieškojimo iš įkeisto turto procesas, tokio proceso problematika. Darbe iškeliamas tikslas išanalizuoti išieškojimo iš įkeisto turto procesą, nustatyti kylančias problemas, apsunkinančias efektyvią kreditorių interesų apsaugą bei skolininkų interesų garantiją, pasiūlyti galimus sprendimo būdus. Tikslo pasiekimas įgyvendinamas šiais uždaviniais: palyginti išieškojimo iš įkeisto turto procesą su išieškojimo procesu bendra tvarka, atlikti išsamią išieškojimo iš įkeisto turto procesą reglamentuojančių teisės normų analizę, nuodugniai išstudijuoti susiformavusią teismų praktiką taikant teisės normas, reglamentuojančias išieškojimą iš įkeisto turto. Pirmajame darbo skyriuje nustatomi išieškojimo proceso iš įkeisto turto ir išieškojimo proceso bendra tvarka esminiai skirtumai ir panašumai. Vadovaujantis nustatytais esminiais skirtumais ir panašumais, atskleidžiamas minėtų išieškojimo procesų tarpusavio ryšys. Antrajame darbo skyriuje analizuojamas išieškojimas iš įkeisto nekilnojamojo turto. Skyrius suskirstytas į du poskyrius... [toliau žr. visą tekstą] / The effective kinds of security of performance of obligations are becoming more important not only in the period of rapidly developing credit intercourses, but also as banks and other credit institutions are actively expanding their miscellaneous credit policy. At this economically dramatic period not only kinds of security of performance of obligations are targeted, but also the procedures which are applied in order to recover from collateral. Thus the object of this master degree thesis is the process of the recovery from collateral, the issues of such recovery process. The aim of the final master degree thesis is to deliver an exhaustive analysis of the process from collateral, to ascertain the problems, which compound the effective security of creditor’s interests and the appropriate guarantee of debtor’s interests, also propose possible solutions of determined problems. The above goals are achieved through the comparison of recovery process from collateral and recovery process in general, the analysis of rules of law, regulating the recovery from collateral, the exhaustive analysis of application of aforementioned rules of law in practice. The first section of the thesis discusses the essential differences and similarities of the recovery process from collateral and recovery process in general. By discussing it the intercourse of these processes is determined. The second section gives an analysis of the recovery process from the mortgaged assets. The section is divided... [to full text]

Magistro baigiamajame darbe analizuojama daiktinės teisės koncepcija ir jos įsitvirtinimo Kontinentinėje teisėje priežastys, pateikiamas daiktinės teisės apibrėžimas, savybės, daiktinių teisių objektų genezė, autorius kritikuoja materialaus daikto koncepciją. Antrajame darbo skyriuje apžvelgiamas konkrečių daiktinių teisių turinys, šių daiktinių teisių turėtojų apsauga vykdymo procese ir nemokumo procesuose. Darbe analizuojamos nuosavybės teisė bei daiktiniai prievolių vykdymo užtikrinimo būdai – hipoteka ir įkeitimas. Poskyriuose apie hipoteką ir įkeitimą analizuojamas kreditorių daiktinių teisių apsaugos turinys ir mechanizmas vykdymo procese bei apsaugos turinio transformacijos įmonių bankroto bei restruktūrizavimo procesuose, apžvelgiamos naujovės priverstinės hipotekos reglamentavime Lietuvos Respublikoje, pateikiama absoliučiai privilegijuotos kreditorių–įkaito turėtojų padėties kritika, remiantis ekonominio efektyvumo, rizikos paskirstymo bei socialinio teisingumo kriterijais. Trečiajame darbo skyriuje analizuojamas Rusijos Federacijos teisės aktuose įtvirtintas kreditorių daiktinių teisių apsaugos teisinis reglamentavimas vykdymo procese bei nemokumo procesuose. Analizuojamos Rusijos Federacijos Civilinio Kodekso, Įstatymo dėl įkeitimo, Įstatymo dėl nekilnojamojo turto įkeitimo (hipotekos) bei kitų įstatymų nuostatos. Ketvirtajame darbo skyriuje analizuojamas kreditorių daiktinių teisių apsaugos mechanizmas esant nemokumo situacijai, kuri išeina už vienos Europos... [toliau žr. visą tekstą] / The thesis analyses the concept of rights in rem, the circumstances of their establishment in the legal systems of Continental Europe. The author gives a brief description of rights in rem, emphasizes the features of them, investigates the genesis of objects falling under the definition. The author criticizes the concept of a material thing as an obsolete and unsuitable for the needs of a modern legal system. In the second section of the thesis, the author examines a substance of specific rights in rem, the protection of the right holders in the executory process and in the processes of bankruptcy and restructuring. The thesis is concentrated upon the law of property, mortgage and pawn. In the subsections regarding the latter two, the matters and mechanisms of right holders protection are being analyzed: firstly in a context of executory process, secondly - their transformations in the processes of insolvency. The insights concerning recent novelties in the regulation of compulsory mortgage in the Republic of Lithuania are given. The author considers a soundness of the exclusively privileged position of the secured creditors in the insolvency with regard to economic efficiency, risk–sharing and social equality. In the third section of the thesis the author analyses the right holders protection in Russian Federation: the research is based on the Russian Civil code, the Law on pawns, the Law on mortgages and other relevant laws. The fourth section of the thesis is dedicated to... [to full text]

This dissertation focuses on mortgage defaults in Southern California during the housing bubble of the 2000s. The rapid decline in the housing market that precipitated the current recession has been accompanied by an unprecedented number of loan defaults and foreclosures. Recent studies have identified two major theories of default--the "double trigger" hypothesis, where negative equity and an income shock are necessary conditions for default--and "strategic default" where negative equity is a sufficient condition for default. This paper adds to the default literature by adding short sale as another possible outcome of mortgage default. The primary goal is to analyze the determinants of mortgage default to assist in understanding the conditions under which strategic behavior of home sales is most likely to occur. Data from Los Angeles County was analyzed from 2007 to 2010 for every closed sale, then coded into three possible sales outcomes: 1) Organic 2) Short Sale 3) Real Estate Owned (REO). A multinomial probit model was used to model homeowner decision-making based on the sale outcome. The model rejected the "double trigger" hypothesis, as it was found that income shocks do no have a significant effect on impacting the predicted probability for distressed sales. Education levels, the sales price of homes, credit card debt, and market price reductions were found to be significant variables in determining distressed sales outcomes, thereby confirming the strategic default hypothesis. The next section studied spatial association of short sales and REO to see if any contagion effects were present. It was found that both short sales and REO form into clusters of hot and cold spots. Social stigma is believed to impact consumer behavior, the theory was confirmed through the findings of contagion and spatial lag. The final section constructed a hedonic price model to capture the price effects that distressed sales have on neighborhood pricing. Foreclosures were found to have three times the negative impact on neighborhood pricing compared to short sales.

A topical issue in financial economics is the development of appropriate stochastic dynamic models for banking items and behavior. The issue here is to fulfil the need to generalize the more traditional discrete-time models of banking activity to a Levy process setting. In this thesis, under the assumption that the loan market is imperfectly competitive, we investigate the evolution of banking items such as bank assets (cash, bonds, shares, Treasuries, reserves, loans and intangible assets), liabilities (demand deposits) and bank capital (bank equity, subordinate debt and loan loss reserves). Here we consider the influence of macroeconomic factors and profitability as well as its indicators return on assets (ROA) and return on equity (ROE). As far as bank assets are concerned, we note that loan pricing models usually reflect the financial funding cost, risk premium to compensate for the risk of default by the borrower, a premium reflecting market power exercised by the bank and the sensitivity of the cost of capital raised to changes in loans extended. On the other hand, loan losses can be associated with an offsetting expense called the loan loss provision (LLP), which is charged against Nett profit. This offset will reduce reported income but has no impact on taxes, although when the assets are finally written off, a tax-deductible expense is created. An important factor influencing loan loss provisioning is regulation and supervision. Measures of capital adequacy are generally calculated using the book values of assets and equity. The provisioning of loans and their associated write-offs will cause a decline in these capital adequacy measures, and may precipitate increased regulation by bank authorities. Greater level of regulation generally entail additional costs for the bank. Currently, this regulation mainly takes the form of the Basel II Capital Accord that has been implemented on the worldwide basis since 2008. It is clear that bank profitability is a major indicator of financial crises for households, companies and financial institutions. An example of this from the 2007-2008 subprime mortgage crisis (SMC) is the U.S. bank, Wachovia Corp., who reported a big loss as from the first quarter of 2007 and eventually was bought by the world's largest bank, Citigroup, on 29 September 2008. A further example from the SMC is that both the failure of the Lehman Brothers investment bank and the acquisition in September 2008 of Merrill Lynch and Bear Stearns by Bank of America and JP Morgan Chase, respectively, were preceded by a decrease in profitability and an increase in the price of loans and loan losses. The subprime mortgage crisis is characterized by contracted liquidity in the global credit markets and banking system. The level of liquidity in the banking sector affects the ability of banks to meet commitments as they become due without incurring substantial losses from liquidating less liquid assets. Liquidity, therefore, provides the defensive cash or near-cash resources to cover banks' liability. An undervaluation of real risk in the subprime market is cascading, rippling and ultimately severely adversely affecting the world economy. The downturn in the U.S. housing market, risky lending and borrowing practices, and excessive individual and corporate debt levels have caused multiple adverse effects tumbled as the US housing market slumped. Banks worldwide are hoarding cash and showing a growing reluctance to lend, driving rates that institutions charge to each other on loans to record highs. Also, global money markets are inoperative, forcing increased injections of cash from central banks. The crisis has passed through various stages, exposing pervasive weaknesses in the global financial system and regulatory framework. The stochastic dynamics of the aforementioned banking items assist in formulating a maximization problem that involves endogenous variables such as profit consumption, the value of the bank's investment in loans and provisions for loan losses as control variants. In particular, we demonstrate that the bank is able to maximize its expected utility of discounted profit consumption over a random time interval, [t,r], and terminal profit at time r. Here the term profit consumption refers to the consumption of the bank's profits by dividend payments on equity and interest and principal payments on subordinate debt. The associated Hamilton-Jacobi-Bellman (HJB) equation has a smooth solution when the optimal controls are computed by means of power, logarithmic and exponential utility functions. This enables us to make a direct comparison between the economic properties of the solutions for different choices of the utility function. In keeping with the main theme of this thesis, we simulate the financial indices ROE and ROA that are two measures of bank profitability. We further discuss optimization with power utility where we show the convergence of the Markov Chain Approximation Method (MCAM) and the impact of varying the model parameters in the form of loan loss severity, P, and loan loss frequency, <f>. We investigate the connections between the banking models and Basel II capital accord as well as the current subprime mortgage crises. As a way of conclusion, we provide remarks about the main issues discussed in the thesis and speculate about future research directions. The contents of this thesis is based on 3 peer-reviewed journal articles (see [105], [106] and [107]) and 1 peer-reviewed conference proceedings paper (see [104]). In addition, the paper [108] is currently being prepared for submission to an accredited journal. / Thesis (Ph.D. (Applied Mathematics))--North-West University, Potchefstroom Campus, 2009.