商业银行管理 peter rossChapter18.pptVIP

* * * * * * * * * Predatory Lending and Subprime Loans An Abusive Practice Among Some Lenders That Consists of Granting Loans to Subprime Borrowers and Charging Them Excessive Interest Rates and Fees, Increasing the Risk of Default. Subprime Lending Played Important Role in the 2007 Credit Crisis. 18-* Real Estate Loans Among the Riskiest Loans Banks Can Make Average Size is Larger Than the Average Size of Other Loans Tend to Have Longer Maturities Than Other Loans 18-* Factors Used in Evaluating Real Estate Loans Size of Down Payment Relative to Purchase Price of Property Should Be Evaluated in Terms of Total Relationship Need to Pay Attention to Particular Aspects of Credit Application: Amount and Stability of Income (Gross Debt Service) Available Savings and Source of Down Payment Track Record in Maintaining Property Outlook for Real Estate Market in Local Area Outlook for Interest Rates If Variable Rate Loan 18-* Home Equity Lending Home Owners Can Use the Difference in Home’s Estimated Value and Remaining Mortgages as a Borrowing Base Two Types of Credit Closed End Credit Lines of Credit Can Be Used for Any Legitimate Purpose The 1986 Tax Reform Act Has Helped This Type of Loan Grow in Popularity 18-* Interest Only Mortgages: The Most Controversial of Home Mortgage Loans Many of these are Adjustable Rate Mortgages Home Owner Can Pay the Interest Only for an Initial Period Mortgage Payments Can be Much Higher When Principal Payments are Due Because of the Shorter Period to Repay the Loan Especially Problematic When House Prices Stop Climbing Upward During the Recent Crisis, the Fed Moved to Tighten the Rules on Mortgage Lending to Promote Greater Transparency in Loan Terms 18-* Quick Quiz How do credit-scoring systems work? What are the principal advantages to a lending institution of using a credit-scoring system? In what ways is a real estate loan unique compared to other kinds of bank loans? What factors should a lender consider in evaluating real est