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Keywords:Adjustable rate mortgages 

Journal Article
Flexible rate?

FRBSF Economic Letter

Journal Article
Call to ARMS

FRBSF Economic Letter

Journal Article
Alternatives to Libor in consumer mortgages

Many adjustable rate mortgages in the United States are indexed to Libor. While the accuracy of this rate has recently been called into question, another issue affecting U.S. borrowers has become evident since the onset of the financial crisis. Specifically, many U.S. consumers with Libor-based loans may have been hit with substantially higher payments when their loans reset during the financial crisis than if those loans had been tied to a Treasury rate. We investigate several alternative reference rates for consumer loans and estimate their payment effects on a large sample of Libor-linked ...
Economic Commentary , Issue Oct

Journal Article
Adjustable-rate mortgages and the Libor surprise

Adjustable-rate mortgages have typically been tied to either of two indexes, one based on U.S. treasuries, the other on the London interbank offered rate, or Libor. The index is used to determine a mortgage?s new interest rate when it is reset, and up until recently, the choice would have made little difference. But since 2007, the rates on which the indexes are based have diverged sharply, and borrowers with Libor-based adjustable-rate mortgages are likely to pay more than they would have had their mortgages been tied to treasuries. Moreover, the proportion of Libor-based ARMs has increased ...
Economic Commentary , Issue Jan

Journal Article
Fed publishes revised handbook on adjustable rate mortgages

Underscoring banking regulators' concerns about the growing use of nontraditional mortgages, the Consumer Handbook on Adjustable-Rate Mortgages has undergone one of its most substantial revisions since its 1987 publication.
Financial Update , Volume 20 , Issue 1

Journal Article
Housing specialists

FRBSF Economic Letter

Journal Article
Has the housing boom increased mortgage risk?

Southwest Economy , Issue Sep , Pages 1-6

Journal Article
Variable rate residential mortgages: the early experience from California

Economic Review , Issue Sum , Pages 5-16

Journal Article
Why is the market share of adjustable-rate mortgages so low?

Over the past several years, U.S. homebuyers have increasingly favored fixed-rate mortgages over adjustable-rate mortgages (ARMs). Indeed, ARMs have dropped to less than 10 percent of all residential mortgage originations, a near-record low. One might speculate that the decline in the ARM share has been driven by ?one-off? factors relating to the financial crisis. However, a statistical analysis suggests that recent trends can largely be explained by the same factors that have historically shaped mortgage choice?most notably, the term structure of interest rates and its effects on the ...
Current Issues in Economics and Finance , Volume 16 , Issue Dec

Report
Payment changes and default risk: theimpact of refinancing on expected credit losses

This paper analyzes the relationship between changes in borrowers' monthly mortgage payments and future credit performance. This relationship is important for the design of an internal refinance program such as the Home Affordable Refinance Program (HARP). We use a competing risk model to estimate the sensitivity of default risk to downward adjustments of borrowers' monthly mortgage payments for a large sample of prime adjustable-rate mortgages. Applying a 26 percent average monthly payment reduction that we estimate would result from refinancing under HARP, we find that the cumulative ...
Staff Reports , Paper 562

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