This paper investigates relative pricing determinants of the fixed-rate mortgage (FRM) versus adjustable-rate mortgage (ARM) decision. A probit model is estimated using data from a national sample of residential housing transactions for the 1986 and 1988 period. The results suggest that the...

This paper analyzes determinants of the fifteen- versus thirty-year fixed-rate mortgage (FRM) loan term decision. Because the thirty-year FRM may be converted (by partial prepayment) to the shorter term, the thirty-year instrument provides the implicit option to extend repayment. Relative rates...

This paper analyzes the effect of financial advisor-monitors on the valuation of real estate investment trust (REIT) mergers. Advisor choice determinants and the effect of advisors on transaction value are examined using a sample of REIT mergers for the 1981 to 2001 period. A two-stage target...

In addition to standard foreclosure, three other methods of resolution for mortgage defaults are available: bankruptcy protection, surrender of deed to the lender, and pre-foreclosure sale. This paper develops a model that specifies the choice of resolution method as a function of the...

This paper extends options-based mortgage default theory to include transaction costs. When transaction costs are considered, the rational borrower will default only when the value of the collateral falls below the mortage value by an amount equal to the net transaction costs. Since, for most...

We develop a unique paired loan dataset containing information on multiple conventional conforming mortgage loans to examine home equity extraction decisions over the 2000–2006 period. The main question addressed is how much households borrow when refinancing their current mortgage debt...