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Articles 1 - 12 of 12
Full-Text Articles in Business
Mortgage Default And Prepayment Risks Among Moderate- And Low-Income Households, Roberto Quercia, Anthony Pennington-Cross, Chao Tian
Mortgage Default And Prepayment Risks Among Moderate- And Low-Income Households, Roberto Quercia, Anthony Pennington-Cross, Chao Tian
Anthony Pennington-Cross
Using a unique sample of community reinvestment loans, we study the propensity of very low-income households to terminate a mortgage and compare it to the outcomes for low-income and moderate-income households. The results indicate that, even within moderate- and low-income segments, lower or very low income is associated with higher default and lower prepayment probabilities. In addition, depending on how low the borrower's income is, classic determinants of loan termination such as credit scores, the amount of equity in the home and local labor market conditions can have different impacts on default and prepayment probabilities.
Differential Impacts Of Structural And Cyclical Unemployment On Mortgage Default And Prepayment, Roberto Quercia, Anthony Pennington-Cross, Chao Tian
Differential Impacts Of Structural And Cyclical Unemployment On Mortgage Default And Prepayment, Roberto Quercia, Anthony Pennington-Cross, Chao Tian
Anthony Pennington-Cross
The Great Recession (the fourth quarter of 2007 through the second quarter of 2009) has been characterized by high rates of foreclosures and unemployment. Using a sample of community reinvestment loans, we examine the impact of structural unemployment and cyclical unemployment on mortgage terminations (default and prepayment). We find that mortgage default and prepayment are more sensitive to changes in the structural component of the local unemployment rate than in the cyclical component. In addition, depending on whether structural unemployment rates are high or low, borrowers and lenders react differently to the incentives to terminate a loan.
The Evolution Of The Subprime Mortgage Market, Souphala Chomsisengphet, Anthony Pennington-Cross
The Evolution Of The Subprime Mortgage Market, Souphala Chomsisengphet, Anthony Pennington-Cross
Anthony Pennington-Cross
This paper describes subprime lending in the mortgage market and how it has evolved through time. Subprime lending has introduced a substantial amount of risk-based pricing into the mortgage market by creating a myriad of prices and product choices largely determined by borrower credit history (mortgage and rental payments. foreclosures and bankruptcies, and overall credit scores) and down payment requirements. Although sub prime lending still differs from prime lending in many ways, much of the growth (at least in the securitized portion of the market) has come in the least-risky (A-) segment of the market. In addition, lenders have imposed …
Commercial Property Rent Dynamics In U.S. Metropolitan Areas: An Examination Of Office, Industrial, Flex And Retail Space, Maria Ibanez, Anthony Pennington-Cross
Commercial Property Rent Dynamics In U.S. Metropolitan Areas: An Examination Of Office, Industrial, Flex And Retail Space, Maria Ibanez, Anthony Pennington-Cross
Anthony Pennington-Cross
This paper is concerned with the market rental rate for space offered by commercial property and how that rental rate evolves over time. Rental rates reflect the value of the services provided by the property and can have a significant impact on the ability of its owners to make monthly debt obligations. We investigate commercial property rent dynamics for 34 large metropolitan areas in the U.S. The dynamics are studied from the second quarter of 1990 through the second quarter of 2009 and the results are compared across four property types or uses (office, industrial, flex, and retail). There is …
State And Local Anti-Predatory Lending Laws: The Effect Of Legal Enforcement Mechanisms, Raphael Bostic, Kathleen Engel, Patricia Mccoy, Anthony Pennington-Cross, Susan Wachter
State And Local Anti-Predatory Lending Laws: The Effect Of Legal Enforcement Mechanisms, Raphael Bostic, Kathleen Engel, Patricia Mccoy, Anthony Pennington-Cross, Susan Wachter
Anthony Pennington-Cross
Subprime mortgage lending has grown rapidly in recent years and with it, so have concerns about predatory lending. In response to evidence of predatory lending, most states have enacted new laws or expanded existing laws to address abuses in the subprime home loan market. The effect of these statutes is a matter of debate. This paper seeks to improve the understanding of this increasingly important issue and pays particular attention to the role that legal enforcement mechanisms play in this context. The results of the analysis are consistent with the view that anti-predatory lending laws influence subprime lending markets and …
Measuring The Impact Of Agglomeration On Productivity: Evidence From Chilean Retailers, Sergio Garate, Anthony Pennington-Cross
Measuring The Impact Of Agglomeration On Productivity: Evidence From Chilean Retailers, Sergio Garate, Anthony Pennington-Cross
Anthony Pennington-Cross
This research extends the agglomeration literature to a country that has not been studied and a market sector that has received little attention. The majority of research that examines how density affects productivity has indirectly measured productivity through worker wages or property prices. The research uses individual supermarkets’ store productivity, proxied by 10 years of annual sales per square foot. Studying supermarkets permits the examination of the effect consumers might have on productivity. Agglomerations (density) could increase or decrease productivity depending on the relative extent of increased competition versus productivity gains, as consumers choose where to shop based on their …
Local Economic Risk Factors On The Primary And Secondary Mortgage Markets, Brent Ambrose, Anthony Pennington-Cross
Local Economic Risk Factors On The Primary And Secondary Mortgage Markets, Brent Ambrose, Anthony Pennington-Cross
Anthony Pennington-Cross
This paper presents a cross-sectional analysis of the spatial distribution of loans in the primary and secondary mortgage markets. Aggregating loan originations to the MSA level, we examine the proportion of the market served by FHA and conventional lenders. We model the geographic differences in market shares as a function of supply, demand, and economic risk factors. Results indicate that FHA market shares are higher in cities with higher economic risk characteristics. To examine the role of GSE activity, we model the spatial distribution of the disposition of conventional loans. Again, we focus on the impact of local economic risk …
Fayetteville And Hot Springs Lead The Recovery In Employment, Giang Ho, Anthony Pennington-Cross
Fayetteville And Hot Springs Lead The Recovery In Employment, Giang Ho, Anthony Pennington-Cross
Anthony Pennington-Cross
No abstract provided.
Credit History And The Fha-Conventional Choice, Anthony Pennington-Cross, Joseph Nichols
Credit History And The Fha-Conventional Choice, Anthony Pennington-Cross, Joseph Nichols
Anthony Pennington-Cross
Models explaining whether households choose conventional or FHA mortgage financing typically use differential insurance premiums, loan-to-value (LTV) and payment-to-income underwriting standards, and local economic conditions to explain household behavior. Using a large and geographically diverse sample, we expand the standard choice model by including measures of borrower credit history. We find that the ability of a homebuyer to avoid credit problems is an important part of the FHA–conventional choice. In addition, credit scores of FHA borrowers are worse on average than those of conventional borrowers, but as LTV increases credit scores of conventional borrowers deteriorate.
States Fight Predatory Lending Laws In Different Ways, Giang Ho, Anthony Pennington-Cross
States Fight Predatory Lending Laws In Different Ways, Giang Ho, Anthony Pennington-Cross
Anthony Pennington-Cross
To restrict predatory lending in the subprime (high cost) mortgage market, Congress enacted in 1994 the Home Ownership and Equity Protection Act (HOEPA). This law restricts some types of lending and requires lenders to disclose additional information about loans that have predatory features. Following the lead of federal regulations, at least 23 states, beginning with North Carolina in 1999, have introduced their own predatory lending laws, using HOEPA as a template.1 Perhaps not surprisingly, research focusing on the impact of the North Carolina law found that the rate of applications and originations for subprime loans declined after the law took …
Mortgage Product Substitution And State Anti-Predatory Lending Laws: Better Loans And Better Borrowers?, Raphael Bostic, Souphala Chomsisengphet, Kathleen Engel, Patricia Mccoy, Anthony Pennington-Cross, Susan Wachter
Mortgage Product Substitution And State Anti-Predatory Lending Laws: Better Loans And Better Borrowers?, Raphael Bostic, Souphala Chomsisengphet, Kathleen Engel, Patricia Mccoy, Anthony Pennington-Cross, Susan Wachter
Anthony Pennington-Cross
Mounting foreclosures and recent disclosures of abusive lending practices have led many states to adopt new anti-predatory lending laws. Researchers have examined the impact of such laws on credit flows and the cost of credit. This research extends the literature by examining if the market responded to these laws by substituting different mortgage products for those restricted by antipredatory lending provisions. The evidence indicates that the new laws were effective in restricting loans with targeted characteristics and that the market substituted other product types to maintain affordability in the face of these restrictions.
Measuring External Shocks To The City Economy: An Index Of Export Prices And Terms Of Trade, Anthony Pennington-Cross
Measuring External Shocks To The City Economy: An Index Of Export Prices And Terms Of Trade, Anthony Pennington-Cross
Anthony Pennington-Cross
This paper details the construction of an index of export goods prices (the Export Price Index or EPI) for a panel of 196 metropolitan areas from 1977 to 1992. The EPI is an indicator of external demand shocks to the city economy which does not suffer from the causal ambiguity of the endogenous indicators such as income, employment or output. The creation of an index of aggregate export prices, the EPI, for the panel of areas provides both academicians and policy analysts with a new exogenous indicator that identifies demand price innovations and the terms of trade shocks …