Journal article
Legal restrictions, credit allocation and default risk under fixed and adjustable rate mortgages
Housing finance review, Vol.7(3), pp.225-247
1988
Abstract
A model of the lender mortgage investment decision criteria in the presence of legal restrictions was specified and estimated using a logit specification. Contrary to allegations of credit discrimination, the lender is found not to allocate mortgage credit away from certain borrower groups, or away from certain geographic areas. The results also indicate that the informational restrictions imposed by Credit Acts may have affected the lender's ability to assess real differences in default risk among borrowers. Interestingly, the results document the significance of ARM design parameters on default risk which supports the contention by causal empiricists of higher default rates on ARMs relative to FRMs. The dominant factors however, determining default probabilities are not instrument specific.
Details
- Title: Subtitle
- Legal restrictions, credit allocation and default risk under fixed and adjustable rate mortgages
- Creators
- Jarjisu Sa-Aadu
- Resource Type
- Journal article
- Publication Details
- Housing finance review, Vol.7(3), pp.225-247
- ISSN
- 0276-4415
- Language
- English
- Date published
- 1988
- Academic Unit
- Finance
- Record Identifier
- 9984380628002771
Metrics
4 Record Views