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Keywords:Home equity loans 

Journal Article
Have home equity loans survived the decline in home equity?

New England Banking Trends , Issue Jun , Pages 3-5

Journal Article
Determining coverage under HOEPA

To understand how these amendments affect a typical home equity loan, a loan example has been developed that incorporates the changes in the regulation. The annual percentage rate test and the points and fees test are applied to a loan example.
e-Perspectives , Issue 2

Working Paper
The impact of local predatory lending laws on the flow of subprime credit

Local authorities in North Carolina, and subsequently in at least 23 other states, have enacted laws intending to reduce predatory and abusive lending. While there is substantial variation in the laws, they typically extend the coverage of the Federal Home Ownership and Equity Protection Act (HOEPA) by including home purchase and open end mortgage credit, by lowering annual percentage rate (APR) and fees and points triggers, and by prohibiting or restricting the use of balloon payments and prepayment penalties. Empirical results show that the typical local predatory lending law tends to ...
Working Papers , Paper 2006-009

Working Paper
Does it pay to read your junk mail? evidence of the effect of advertising on home equity credit choices

We examine the effect of direct mail (commonly referred to as junk mail) advertising on individual financial decisions by studying consumer choice of home equity debt contracts. Consistent with the theoretical predictions, we find that financial variables underlying the relative pricing of debt contracts are the leading factors explaining consumers home equity debt choice. Furthermore, we also find that the intended use of debt proceeds significantly impacts consumer choice. However, when we study a subset of consumers who received a direct mail solicitation for a particular debt contract ...
Working Paper Series , Paper WP-08-09

Working Paper
Loan servicer heterogeneity and the termination of subprime mortgages

After a mortgage is originated the borrower promises to make scheduled payments to repay the loan. These payments are sent to the loan servicer, who may be the original lender or some other firm. This firm collects the promised payments and distributes the cash flow (payments) to the appropriate investor/lender. A large data set (loan-level) of securitized subprime mortgages is used to examine if individual servicers are associated with systematic differences in mortgage performance (termination). While accounting for unobserved heterogeneity in a competing risk (default and prepay) ...
Working Papers , Paper 2006-024

Working Paper
Reverse mortgage loans: a quantitative analysis

Reverse mortgage loans (RMLs) allow older homeowners to borrow against housing wealth without moving. In spite of growth in this market, only 2.1% of eligible homeowners had RMLs in 2011. In this paper, we analyze reverse mortgages in a life-cycle model of retirement, calibrated to age-asset profiles. The ex-ante welfare gain from RMLs is sizable at $1,000 per household; ex-post, low-income, low-wealth and poor-health households use them. Bequest motives, nursing-home moving risk, house price risk, and interest and insurance costs all contribute to the low take-up rate. The model predicts ...
Working Papers , Paper 13-27

Journal Article
Consumer debt and home equity borrowing

Economic Perspectives , Volume 17 , Issue Mar , Pages 2-13

Discussion Paper
Did easy credit lead to economic peril?: home equity borrowing and household behavior in the early 2000s

Using data from the Panel Study of Income Dynamics, this paper examines how households' home equity extraction during 2001-to-2003 and 2003-to-2005 affected their spending and saving behavior. The results show that a one-dollar increase in equity extraction led to ninety-five or ninety-eight cents higher consumption expenditures. Nearly all of this spending increase was reversed in the subsequent period. A fair amount of these expenditures went toward home improvements and repairs. In addition, households used home equity to help finance their purchases of used cars. Equity extraction also ...
Public Policy Discussion Paper , Paper 09-7

Journal Article
Recent developments in home equity lending

The equity that has accumulated in homes is one of the largest components of U.S. household wealth. In recent years, many homeowners have borrowed large amounts against that equity, frequently to finance new consumption expenditures or pay down outstanding consumer debt. In view of the growing importance of home equity credit in household finances, the Federal Reserve has for a number of years participated in nationwide surveys of the use of home equity loans. This article presents findings from a 1997 survey and from other sources of information on home equity lending.
Federal Reserve Bulletin , Volume 84 , Issue Apr

Journal Article
The golden years dilemma

With 3.2 million baby boomers eligible to retire this year, how many will be able to meet daily financial needs and still preserve home equity? The author advises seniors to plan carefully and learn about the many forms of assistance available.
Communities and Banking , Issue Sum , Pages 16-19


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