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Concentration in Mortgage Lending, Refinancing Activity and Mortgage Rates

Scharfstein, David S. - 2013

We present evidence that high concentration in local mortgage lending reduces the sensitivity of mortgage rates and refinancing activity to mortgage-backed security (MBS) yields. A decrease in MBS yields is typically associated with greater refinancing activity and lower rates on new mortgages....

Persistent link: https://www.econbiz.de/10012459506

Optimal Recursive Refinancing and the Valuation of Mortgage-Backed Securities

Longstaff, Francis A. - 2004

We study the optimal recursive refinancing problem where a borrower minimizes his lifetime mortgage costs by repeatedly refinancing when rates drop sufficiently. Key factors affecting the optimal decision are the cost of refinancing and the possibility that the mortgagor may have to refinance at...

Persistent link: https://www.econbiz.de/10012468271

Owning, Using and Renting : Some Simple Economics of the "Sharing Economy"

Horton, John J. - 2016

New Internet-based markets enable consumer/owners to rent out their durable goods when not using them. Such markets are modeled to determine ownership, rental rates, quantities, and surplus generated. Both the short run, before consumers can revise their ownership decisions, and the long run, in...

Persistent link: https://www.econbiz.de/10012456645

Liquidation Values and the Credibility of Financial Contract Renegotiation : Evidence from U.S. Airlines

Benmelech, Efraim - 2008

How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidation values determine the allocation of bargaining power between creditors and debtors, there is little empirical evidence on financial...

Persistent link: https://www.econbiz.de/10012464587

The Economics of Time-Limited Development Options : The Case of Oil and Gas Leases

Herrnstadt, Evan M. - 2020

Oil and gas leases between mineral owners and extraction firms ubiquitously include royalty and primary term clauses. The royalty denotes the share of revenue that is paid to the mineral owner, and the primary term specifies the date by which the firm must complete a well, lest it lose the...

Persistent link: https://www.econbiz.de/10012481748

The Role of Leasing under Adverse Selection

Hendel, Igal - 1998

Leasing contracts specify a rental rate and an option price at which the used good can be bought at the termination of … prices. In contrast, under adverse selection, leasing contracts affect equilibrium allocations in a way that matches observed … behavior in the car market. We show that a social planner can use leasing contracts to improve welfare but they are imperfect …

Persistent link: https://www.econbiz.de/10012472232

Measuring The Natural Rate Using Natural Experiments

Bäcker-Peral, Verónica; Hazell, Jonathon; Mian, Atif - National Bureau of Economic Research - 2023

Every month, a fraction of UK property leases are extended for another 90 years or more. We use new data on thousands of these natural experiments from 2003 onwards to estimate the "natural rate of return on capital", \(r_K^\text{*}\), which also represents the long-run dividend-price ratio....

Persistent link: https://www.econbiz.de/10014421185

How Quantitative Easing Works : Evidence on the Refinancing Channel

Maggio, Marco Di - 2016

Despite massive large-scale asset purchases (LSAPs) by central banks around the world since the global financial crisis, there is a lack of empirical evidence on whether and how these programs affect the real economy. Using rich borrower-linked mortgage-market data, we document that there is a...

Persistent link: https://www.econbiz.de/10012456042

A Model of Safe Asset Determination

He, Zhiguo - 2016

What makes an asset a "safe asset"? We study a model where two countries each issue sovereign bonds to satisfy investors' safe asset demands. The countries differ in the float of their bonds and their resources/fundamentals available to rollover debts. A sovereign's debt is more likely to be...

Persistent link: https://www.econbiz.de/10012456404

Mortgage Refinancing, Consumer Spending, and Competition : Evidence from the Home Affordable Refinancing Program

Agarwal, Sumit - 2015

Using proprietary loan-level data, we examine the ability of the government to impact mortgage refinancing activity and spur consumption by focusing on the Home Affordable Refinancing Program (HARP). The policy relaxed housing equity constraints by extending government credit guarantee on...

Persistent link: https://www.econbiz.de/10012457156