The Residential Mortgage Market住宅按揭市场.ppt

* * * * * * * * * * * * The Residential Mortgage Market Mortgage A pledge of property to secure payment of a debt. Property pledged as collateral is real estate Debt is the loan Conventional mortgage Income from Mortgage Origination Origination Sale of mortgage in secondary market Service fees Acceptable Collateral for Mortgages Residential Properties houses, condominiums, cooperatives, apartments Commercial Properties multifamily properties, office buildings, industrial properties, shopping centers, hotels, health care facilities Mortgage Originator Principal originators of residential mortgage loans Thrifts Commercial banks Mortgage banks Other private mortgage originators Life insurance companies Pension funds Mortgage Origination Process Evaluating Credit Risk Payment-To-Income Ratio Loan-To-Value Ratio Commitment Letter form Lender Choice of Type of Mortgage Fixed-rate mortgage Adjustable-rate mortgage Use of Mortgages by Originators Mortgage originators can either: hold the mortgage in their portfolio sell the mortgage to an investor use the mortgage as collateral for the issuance of a security called securitization Sale of Mortgage Conforming mortgages meet agency underwriting standards Maximum PTI Maximum LTV Maximum loan amount Nonconforming mortgages do not meet agency underwriting standards Can be held as portfolio investment Can be securitized Risks Associated with Mortgage Origination Pipeline Risk risk associated with originating mortgages Price Risk risk of adverse effect on value of pipeline if mortgage rates rise Fallout Risk risk that applicants with commitment letters will not close Mortgage Servicer Sources of fees servicing fee interest on escrow float earned on the monthly mortgage payment ancillary income such as late fee, commissions on cross-selling, and selling mailing lists other loans Credit Classifications Prime Subprime Alt-A Fully Amortized Loan Where MP = monthly mortgage payment MBo = original mortgage balance