ISSN:1080-8620    

DOI:10.1111/1540-6229.00632

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

This paper examines the effects of finanacial, demographic and housing variables on older homeowners' propensity to make a variety of housing changes. Pooled cross‐sectional data from the Panel Study of Income Dynamics is used in a multinomial logit framework. The results indicate that demographic factors are much more important than financial factors in explaining housing changes by older homeowner

ISSN:1080-8620    

DOI:10.1111/1540-6229.00633

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

Housing wealth constitutes most of the non‐pension wealth of the elderly population. This study analyzes the potential of reverse mortgages to increase the income and liquid wealth of the elderly by identifying households with relatively high levels of housing equity. Because this article looks at the whole distribution of elderly households and considers debt as well as income, it finds a larger potential market for reverse mortgages than previous studies.Calculations from the 1990 Survey of Income and Program Participation and Census population estimates show that over six million homeowners in the United States could increase their effective monthly income by at least 20% by using a reverse mortgage. Of these, more than 1.3 million have no children. Furthermore, a reverse mortgage would allow over 1.4 million poor elderly persons to raise their incomes above the poverty lin

ISSN:1080-8620    

DOI:10.1111/1540-6229.00634

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

A variety of reverse mortgage loan programs have been available to elderly households for over a decade. The number of unrestricted reverse mortgage loans issued by the private sector has been quite small. About 12,000 loans have been issued through mid‐1992. Some researchers take this to mean that the size of the potential market for reverse mortgages is also quite small. Other researchers claim that current low levels of activity reflect supply and demand problems, but that the potential market is in fact quite large.This paper uses American Housing Survey (AHS) data to estimate the potential size of the market for unrestricted reverse mortgages. The 1989 national AHS shows that there are over twelve million elderly homeowners (age 62 and over) who own their homes free and clear. Depending on their income, age and the level of home equity, the group of households most likely to benefit from reverse annuity mortgages is considerably smaller. As one approach to defining a lower bound of the estimate of potential beneficiaries from reverse mortgages, we count the number of homeowners in a prime group consisting of the older elderly, aged 70 or above, with an annual income of $30,000 or less, with home equity between $100,000 and $200,000, who have lived in their homes for over ten years. We estimate that there are about 800,000 elderly households in this prime group. For such households, reverse mortgage payments could represent a substantial percentage increase in income; other definitions of target groups can also be explored using the tables provided.The paper uses the 1985 through 1988 AHS Standard Metropolitan Statistical Area (SMSA) surveys to identify areas that have a large number of elderly homeowners in the prime target group, and in which these homeowners represent a large fraction of the elderly homeowner population. These locations are likely targets for introduction of reverse mortgage products because any campaign can be targeted towards a high concentration of likely eligible beneficiarie

ISSN:1080-8620    

DOI:10.1111/1540-6229.00635

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

This paper describes and evaluates the Home Equity Conversion Mortgage (HECM) insurance demonstration, designed to encourage the development of private reverse mortgage programs by insuring lenders against the risks associated with new mortgage lending programs and with reverse mortgages in particular. The paper evaluates demand for the program by analyzing the attributes of participating borrowers, their properties and the types of payment options chosen. It also presents several observations regarding participation by the financial community in the HECM demonstration, required counseling and legal and regulatory issues that may hamper the growth and development of reverse mortgage programs in general.The findings suggest strong demand for reverse mortgages among “house‐rich, cash‐poor” elderly homeowners, either to supplement inadequate current incomes or to provide a reserve against unexpected lump‐sum expenses. The flexible design of the HECM program addresses a wide variety of borrower financial needs, even though it imposes higher costs on lenders and servicers. The continued growth of the program, however, is hindered by a shortage of qualified housing counselors in some areas, as well as by a variety of legal and regulatory

ISSN:1080-8620    

DOI:10.1111/1540-6229.00636

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

This article analyzes the risks involved with reverse mortgage insurance and explains the pricing model developed for the Home Equity Conversion Mortgage (HECM) demonstration. The paper demonstrates how borrower longevity, interest rates and property value changes all affect pricing, and why the HECM model focuses on property value as the primary source of uncertainty. It goes on to explain why a random walk specification was chosen to forecast property values, and how the principal limit factors, which determine cash payments to borrowers in the HECM program, are calculated.

ISSN:1080-8620    

DOI:10.1111/1540-6229.00637

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

A pricing model is developed for a reverse mortgage contract where the borrower receives payments either as a lump sum or in an annuity while the loan balance accumulates as a claim against the house. No underwriting criteria on income are applied. One risk of default is that the borrower will remain in the house after the negatively amortizing loan balance exceeds the value of the house. An explicit pricing model of the reverse mortgage permits the evaluation of this default “crossover” option. Alternative methods involving life insurance contracts and securitization are compared as secondary market chann

ISSN:1080-8620    

DOI:10.1111/1540-6229.00638

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

We develop and apply a valuation model that quantifies the interest rate risk inherent in fixed‐rate reverse mortgages. Consistent with intuition, our results show that the interest rate risk of a reverse mortgage is greater than that of either a typical coupon bond or a regular mortgage. Somewhat surprisingly, we find that this difference in interest rate risk is extremely large. In fact, the interest rate risk of a reverse mortgage often is several orders of magnitude greater than the interest rate risk of other fixed‐income securit

ISSN:1080-8620    

DOI:10.1111/1540-6229.00639

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

This paper presents a detailed assessment of the Connecticut Housing Finance Authority (CHFA) reverse annuity mortgage (RAM) program. Because of the size and payment history of the program, the analysis provides an empirical framework on which to develop and assess other home equity conversion (HEC) programs. The program offers insights into the economic impact of these programs and the factors affecting prepayment. The program issued 765 annuities over five years, and 240 of these loans have terminated payments. The annuity payments had a demonstrable financial impact on the elderly participants, with an 88% average annual income increase. Prepayment rates varied across borrower and loan characteristics. The rates were most sensitive to marital status and were heavily affected by the age of the borrower and the term of the loan. Although default risk exists, the evidence indicates a low probability of the loan value exceeding the house value.

ISSN:1080-8620    

DOI:10.1111/1540-6229.00640

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY

摘要:

This paper develops a theoretical model of the problem of maintenance risk in reverse mortgages (RMs) and home equity conversion instruments generally. By maintenance risk, we refer to the incentive homeowners will have to reduce maintenance expenditures as their equity in the house falls during the term of the RM. The underlying reason for this tendency is the limited liability feature of RMs, given that a borrower's obligation to the lender at. maturity is limited to the value of the house.The results of the model show that lenders will respond to this problem either by limiting the amount of RM loans to guarantee that maintenance risk is not a threat, or by charging an interest rate premium to cover the expected cost of default. Unfortunately, there do not exist data to test the importance of maintenance risk as a possible limitation on the extent of the RM market.

ISSN:1080-8620    

DOI:10.1111/1540-6229.00641

出版商:Blackwell Publishing Ltd    

年代:1994

数据来源: WILEY