Thesis (Ph. D.)--University of Hong Kong, 1999. / Includes bibliographical references (leaves 108-109).

The financial crisis of 2007-2009 exposed the credit risks of mortgage-backed securities (MBS). Nevertheless, prepayment remains one of the most important risks of MBS for MBS issuers and purchasers. When mortgages are paid off early, the flow of interest income that MBS purchasers were expecting is terminated. The risk of prepayment must be managed. MBS sellers or purchasers often obtain insurance to protect against this risk. The purpose of this study is to present a model of prepayment rates that is more accurate and precise than other models currently in use. The new model explains the prepayment rate by using the method of panel-corrected standard errors (PCSE). With this method, refinancing incentive, burnout, seasoning, prepayment penalty, and changes in house prices have a substantial effect on the prepayment rate. This study also shows that a feasible generalized least squares (FGLS), which often results in overconfidence for variables, can erroneously identify certain variables as significant. Such variables include the age of mortgage loans with burnout, seasonality, and unemployment rate. Another major finding of this study is that the development of dummy variables for the early months of mortgage pool can provide a better mechanism than the mortgage loan age variable to estimate borrowers’ prepayment characteristics. In addition, this study reveals that, contrary to expectation, the global financial crisis did not lead to a significant increase in the refinancing incentive sensitivity after controlling mortgage loan variables. / text

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We develop a bivariate binomial model to price Mortgage Servicing Rights (MSRs). Our model is an improvement over previous MSR pricing models by explicitly incorporating the realistic assumptions that there are additional costs involved in servicing delinquent loans. In addition to the Hilliard et al. mortgage-pricing tree, we extend additional sub-branches to model the borrower's decision of prepayment, cure, and foreclosure after a loan becomes delinquent. We then investigate how the value of the Mortgage Servicing Right varies with interest rate volatility, house price volatility, delinquency options, deficiency judgments, default penalties, forbearance periods, and speed of adjustments factors.

Thesis (Ph. D.)--University of Washington, 2001. / Vita. Includes bibliographical references (leaves 203-211).

Magister Artium - MA / The aim ofthis study is to analyse the interrelationships among domestic energy needs, the system of prepayment electrification and development as manifested in two lowincome communities of the Cape Metropole, namely Wallacedene and Delft. The study highlights the various dimensions of the following problem: Technological applications such as prepayment systems of electrification (whereby payment precedes the supply of electricity to users) can be rendered ineffective if it is not compatible with all the conditions that shape the livelihoods of its target groups

published_or_final_version / Real Estate and Construction / Doctoral / Doctor of Philosophy

Today's mortgage industry is constantly changing, with adjustable rate mortgages (ARM), loans originated to the so-called "subprime" market, and volatile interest rates. Amid the changes and controversy, lenders continue to originate loans because the interest paid over the loan lifetime is profitable. Measuring the profitability of those loans, along with return on investment to the lender is assessed using Actuarial Present Value (APV), which incorporates the uncertainty that exists in the mortgage industry today, with many loans defaulting and prepaying. The hazard function, or instantaneous failure rate, is used as a measure of probability of failure to make a payment. Using a logit model, the default and prepayment risks are estimated as a function of interest rate. The "optimal" interest rate can be found where the profitability is maximized to the lender.

Traditional economic theory suggests that consumers are likely to prepay for a product/ service that appears to be heavily discounted. However, in reality, many consumers do not think and act to achieve that goal. This is evident in consumer's psychological and behavioral responses toward a new type of price promotion, namely social coupons (SCs) (i.e., online coupons that offer consumers a substantial discount with a long redemption period when they prepay for a retailer's products/services). Such responses generate vital impacts not only on consumers themselves in terms of saving maximization but also on service retailers (e.g., sit-down dining restaurants) and SC providers (e.g., Groupon and LivingSocial) in terms of revenue maximization generated from offering SC campaigns. This dissertation aims to provide insights to the literature in price promotions, specifically SCs. Guided by mental accounting theory (i.e., consumers open a mental account when costs are incurred and close a mental account when benefits are received), this dissertation is structured in the form of two separate empirical essays. While Essay 1, "Prepaying Less is Preferable to Saving More: The Role of Pain of Prepayment Aversion in Social Coupon Purchasing Decision", focuses on opening a SC mental account (i.e., cost incurred), Essay 2, "Superfluous Spending: The Role of Neglected Mental Budget Depletion in Spending Decision when Redeeming Social Coupons", focuses on closing a SC mental account (i.e., benefit received). Essay 1 explored why consumers purchase SCs featuring a low-implausible face value (i.e., a face value that is lower than the normal price range expected by consumers for a particular type of service)? Findings across five experiments revealed that consumers' likelihood of purchasing SCs featuring a low-implausible (vs. plausible) face value was greater when a coupon price for SCs featuring a low-implausible face value was lower than willingness-to-prepay for a SC (WTPP-SC), while a coupon price for SCs featuring a plausible face value was higher than WTPP-SC. Furthermore, consumers' likelihood of purchasing SCs featuring a low-implausible face value was greater when a coupon price was lower (vs. higher) than WTPP-SC. Pain of prepayment (i.e., the disutility/imputed cost, painful feeling, generated from the thought of prepaying amount of money required for a SC) aversion was an underlying process. That is, consumers experienced greater pain of prepayment when a coupon price was higher (vs. lower) than WTPP-SC. Pain of prepayment, in turns, negatively influenced consumers' likelihood of purchasing SCs featuring a low-implausible face value. Moreover, consumers' likelihood of purchasing such SCs was greater when time pressure was present (vs. absent) and when semantic cues were abstract (vs. concrete). Finally, when being exposed to multiple SC deals for the same service, which vary in terms of face value plausibility (Option 1: low-implausible face value vs. Option 2: plausible face value), consumers were more likely to choose a SC deal featuring a low-implausible face value (Option 1) when a coupon price for a SC deal featuring a low-implausible face value was lower than WTPP-SC but a coupon price for a SC deal featuring a plausible face value (Option 2) was higher than WTPP-SC. In contrast, when coupon prices for both SC deal options were lower than WTPP-SC, consumers were more likely to choose a SC deal featuring a plausible face value (Option 2). Essay 2 explored why consumers spend a great additional amount of money beyond a SC face value? Findings across three experiments revealed that the amount of money spent beyond a SC face value was greater when consumers redeem SCs featuring a low-implausible (vs. plausible) face value. Neglected mental budget depletion (i.e., the instance in which consumers neglect the fact that the budget assigned to a particular SC mental account as a spending self-control is already depleted) was an underlying process. That is, consumers had a greater tendency to neglect mental budget depletion when redeeming SCs featuring a low-implausible (vs. plausible) face value. Neglected mental budget depletion, in turns, positively influenced the amount of money spent beyond a SC face value. Furthermore, concrete (vs. abstract) semantic cues and far (vs. near) distance between purchasing and redeeming a SC intensified neglected mental budget depletion effect, which in turns, increased the amount of money spent beyond a SC face value when redeeming SCs featuring a low-implausible face value. In conclusion, this dissertation provides theoretical insights on consumers' psychological responses, and their behavioral responses toward SCs during two SC stages, which results in sub-optimal SC decision-makings: (1) purchasing SCs featuring a low-implausible face value (Essay 1); and (2) spending additional money beyond a SC face value when redeeming SCs at a service retailer (Essay 2). The empirical findings across two essays add to the growing body of the literature in price promotions, specifically SCs. This dissertation also provides managerial insights regarding how managers can design and strategically implement SC campaigns that can maximize the number of SC being purchased and the great amount of money consumers spend beyond a SC face value when they redeem a SC at a service retailer.

Ethiopian Electric Power Corporation (EEPCO), state owned monopoly that generates, transmits, and distributes and sales electric power nationwide, has been undergoing various continued utility management practices. One of the major improvements, as part of the transformation, was the introduction of Prepayment (Metering) System, over that of the conventional metering service, which had been forcing the Corporation to follow lengthy service processes, in order to support the realization of its long term strategic vision of providing quality electric service and being competitive in an energy export. However, despite the introduction of this new type of service-prepayment customer service, the Corporation has not been able to attract more than only about five percent out of the two million total customers. Therefore, this study tried to assess and analyze the existing practice (quality) of prepayment customer service both from the employee and the Corporation’s perspectives, and thereby propose possible marketing strategies that are capable of improving the customer service quality for the subsequent adoption of prepayment service. SERVQUAL, as a methodological approach to service quality measures, was employed to measure the prepayment service quality by comparing customers’ perception of the received service against their expectations. Accordingly, the study revealed, despite its limitations, that there has been a substantial gap between customers’ expectations and perception of the service rendered, for which different possible marketing strategies were suggested for improvement.