Discuss the two theories of mortgage default. What are the most important factors that influence the likelihood of default? Discuss the alternatives to default from the lender’s perspective and the incentives lenders face to offer them.

Q: What does default mean? Does it occur only when borrowers fail to make scheduled loan payments?

A: Default is the risk involved in providing the mortgage loan. Default indicates the incapability of…

Q: How can mechanics’ liens achieve priority over first mortgages that were recorded prior to the…

A: Mechanic’s liens get the priority over the first mortgages when they depend on the state recording…

Q: Explain Early Buyers of Mortgage Loans?

A: Mortgage loans are secured loans that can be availed for obtaining a huge loan amount by providing…

Q: Explain Second Mortgages and Shorter Maturities?

A: It is a type of mortgage loan which is similar to a mortgage loan which is tenable by a borrower's…

Q: Define the term amortized but write down its meaning in your own words in reference to amortized…

A: Since there are multiple questions it is only possible to solve the 1st part.

Q: Comprehensively discuss the consequences of mortgage defaults coupled with the inherent rights to…

A: Mortgage : is a secured loan that is used to purchase a property against a collateral provided by…

Q: understand how the secondary mortgage market functions, remember that the primary function of this…

A: Secondary mortgage market is the market where banks repackage and sell mortgages as securities to…

Q: Describe some of the motives and mistakes made by the mortgage brokers?

A: To market and attract new borrowers for the lenders Assessment of credit history of the borrowers.…

Q: balloon-payment mortgage. Why might a financial institution prefer to offer this type of mortgage?

A: Step 1 A balloon payment is a one-time payment that is bigger than usual at the expiration of the…

Q: Define mortgage securitisation , with a relevent example?

A: Mortgage is a loan agreement between the borrower and the lender, in which the property or real…

Q: in layman's terms, what is the diff. between a mortgage backed security and a credit default swap?

A: The borrowings made for purchasing fixed-assets like land, property, home and apartments is…

Q: interest rate risk differs between mortgage companies and other financial institutions

A: The mortgage company is a financial firm that gives out its own loans. They use their own funds or…

Q: Briefly explain mortgage securitization and how it contributed to the economic crisis.

A: Mortgage securitization is the process of converting the loan into investment as purchasing the bond…

Q: what are two types of credit

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Describe some of the motives and mistakes made by the mortgage securitizers?

A: To market as well as attract borrowers for lenders.Evaluation of the borrower's credit…

Q: Mortgages can be insured? Who insures mortgages and why? Can mortgages be sold? If so, who buys…

A: YES, mortgage can be insured. Mortgage insurance is an insurance policy that protects a mortgage…

Q: Explain why it's possible for tranching to make invest ing in a mortgage -backed security more risky…

A: A mortgage-backed security is a type of security which is backed up by mortgage meaning failing to…

Q: When not used as part of a hedging strategy, which of the following has the lowest level of interest…

A: Since you have posted multiple independent questions, we will solve the first question for you. To…

Q: Explain how a mortgage company’s degree of exposure to interest rate risk differs from that of other…

A: Commercial banks, investment banks, insurance companies, and brokerage firms are the most frequent…

Q: What is private mortgage insurance?  How does it work to protect a lender from risk?   What are the…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Explain further the effects/impacts of default on asset-backed security (ABS) to the financial…

A: The question is based on the concept of asset-backed security (ABS). ABS is a financial instrument…

Q: Explain the difference between conventional mortgages, reverse mortgages, and second mortgages.

A: Difference between Conventional mortgage ,reverse mortgage , second mortgage Mortgage Mortgage is a…

Q: Which of the following situations are likely to result in higher loan defaults?     Mortgages…

A: Loan default implies that borrower is not able to repay debt according to initial predetermined…

Q: What is meant by mortgage foreclosure, and what alternatives are there to such action?

A: A mortgage refers to a debt instrument which is secured by collateral of a piece of land or a real…

Q: Why do adjustable-rate mortgages (ARMs) seem to be a more suitable alternative for mortgage lending…

A: Price level adjustable mortgage (PLAM): Price level adjustable are mortgage loans where the…

Q: Which of the following is a borrower's right provided by the Mortgage Bankers Association that is…

A: The mortgage bankers association (MBA) is referred to as the national association which mainly…

Q: What are the three 'C's' of mortgage underwriting?  What is one way in which each of the 'C's' is…

A: When you buy house than you need loan for home but there is need of down payment also and remaining…

Q: Which of the following are reasons that the actual prepayment rate on a specific mortgage pool…

A: PSA (Public Securities Association Standard Prepayment Model) is referred to as an assumed monthly…

Q: Describe some of the motives and mistakes made by the mortgageoriginators?

A: The mortgage broker did not fix a target. Without a clear aim for the year, couriers can transfer…

Q: e that a friend tells you that you should not rush to pay off your mortgage early because you will…

A: Mortgages are paid by equal amounts of monthly payment that carry the payment of principal amount…

Q: What is the secondary mortgage market? List three reasons why it is important?

A: Secondary market: Secondary market is defined as a place where purchase and sale of securities is…

Q: What’s the purpose of the mortgage amortization for investors

A: Amortization is dividing of mortgage loans into series of payments which constitute principal and…

Q: how collateralized mortgage obligations (CMOs) help to alleviate some of the reinvestment and…

A: Mortgage is a type of debt instrument which is generally secured by collateral. A borrower has to…

Q: what are two types of credit

A: "We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Describe the types of risk associated with mortgages.

A: Mortgage-backed securities: A mortgage backed security is an obligation that represents a claim on…

Q: Explain the Evolution of the Secondary Mortgage Market?

A: The secondary mortgage market is defined as a market created for the purpose and sale of existing…

Q: Which of the following does not relate to credit risks?  a. Credit risk is the possibility of losing…

A: First of all we need to understand the meaning of Credit risk- Credit risk is the probability of…

Q: How does mortgage securitisation impact the financial market?

A: Mortgage securitisation or mortgage backed security is similar to a bond and is made up of a bundle…

Q: Given the role of the loan originator in the securitization process of a mortgage loan described in…

A: Securitization: A process of combining various financial assets and then selling this pool to…

Q: What is the greatest risk in mortgage banking? Group of answer choices Price Risk Fallout Risk…

A: Mortgage Banking:- In Moratage banking, a bank provides Loan servicing, Mortagage banks are…