The Impact of Second Loans on Subprime Mortgage Defaults

An estimated 12.6% of primary mortgage loans were simultaneously originated with a second loan from 2004 until 2008, although relatively little is known about how the presence of such subordinate loans affects the default decisions of borrowers. We use a novel data series of loan servicing records from 2002 until 2010 to identify such borrowers and find evidence that the default behavior of these borrowers significantly differs from borrowers without second loans. Estimating a discrete‐time proportional odds hazard model, we find borrowers with a second loan were 62.7% more likely to default each month on their primary loan when conditioning alone on the attributes of the primary loan. However, borrowers of second loans were 58.3% less likely to default on their primary loan as compared to single‐loan borrowers with equivalent current combined attributes (i.e., loan‐to‐value, balance and interest rate). We hypothesize and provide empirical evidence that this occurs because borrowers with second loans have the option to sequentially default on each loan since subordinate lenders will not pursue foreclosure if borrowers have insufficient equity. Lenders of defaulted subordinate debt may revisit their decision to foreclose in the future after housing markets start to recover, thus prompting a new round of foreclosures.     

Subprime Lending and Real Estate Prices

This article establishes a theoretical and empirical link between the use of aggressive mortgage lending instruments, such as interest‐only, negative‐amortization or subprime mortgages, and the underlying house prices. Such instruments, which come into existence through innovation or financial deregulation, allow more borrowing than otherwise would occur in previously affordability‐constrained markets. Within the context of a model with an endogenous rent‐buy decision, we demonstrate that the supply of aggressive lending instruments temporarily increases the asset prices in the underlying market because agents find it more attractive to own or because their borrowing constraint is relaxed, or both. This result implies that the availability of aggressive mortgage lending instruments magnifies the real estate cycle and the effects of fundamental demand shocks. We empirically confirm the predictions of the model using recent subprime origination experience. In particular, we find that regions that receive a high concentration of aggressive lending instruments experience larger price increases and subsequent declines than areas with low concentration of such instruments. This result holds in the presence of various controls and instrumental variables.     

The Termination of Subprime Hybrid and Fixed‐Rate Mortgages

Adjustable‐rate and hybrid loans have been a larger component of subprime mortgage lending in the mortgage market than prime lending. The typical adjustable‐rate loan in subprime is a hybrid of fixed and adjustable characteristics in which the first 2 years are fixed and the remaining 28 years adjustable. Hybrid loans terminate at elevated probabilities even before the first adjustment date. Hybrid loan terminations are sensitive to interest rates and teaser rates (payment shocks). Default probabilities increase dramatically when payment shocks are mixed with low or no equity in the home. This is the mixture of events that helped to trigger the 2007/2008 subprime mortgage crisis.     

Subprime Refinancing: Equity Extraction and Mortgage Termination

This article examines the choice of borrowers to extract wealth from housing in the high-cost (subprime) segment of the mortgage market and assesses the prepayment and default performance of these cash-out refinance loans relative to the rate of refinance loans. Consistent with survey evidence, the propensity to extract equity is sensitive to the relative interest rates of other forms of consumer debt. After the loan is originated, our results indicate that cash-out refinances perform differently from non–cash-out refinances. For example, cash-outs are less likely to default or prepay, and the termination of cash-outs is more sensitive to changing interest rates and house prices.     

How Subprime Borrowers and Mortgage Brokers Shared the Pie

We develop an equilibrium model for origination fees charged by mortgage brokers and show how the equilibrium fee distribution depends on borrowers' valuation for their loans and their information about fees. We use noncrossing quantile regressions and data from a large subprime lender to estimate conditional fee distributions. Given the fee distribution, we identify the distributions of borrower valuations and informedness. The level of informedness is higher for larger loans and in better educated neighborhoods. We quantify the fraction of the surplus from the mortgage that goes to the broker, and how it decreases as the borrower becomes more informed.     

Subprime governance: Agency costs in vertically integrated banks and the 2008 mortgage crisis

Research summary: This study uses the 2008 mortgage crisis to demonstrate how the relationship between vertical integration and performance crucially depends on corporate governance. Prior research has argued that the vertical integration of mortgage origination and securitization aligned divisional incentives and improved lending quality. We show that vertical integration improved loan performance only in those firms with strong corporate governance and that this performance‐integration relationship strongly decreases and actually reverses as governance quality decreases. We interpret these findings as suggesting that the additional control afforded by vertical integration can, in the hands of poorly monitored managers, offset gains from aligned divisional incentives. These findings support the view that corporate governance influences the strategic outcomes of a firm, in our case, by influencing the effectiveness of boundary decisions. Managerial summary: One of the unanswered questions of the 2008 mortgage crisis is why some firms produced toxic mortgages and others did not. Many have argued that vertically integrated banks—banks that both originated and securitized mortgages—had incentives to monitor themselves and thereby avoid overaggressive lending and outright fraud. Yet many of the worst lenders, such as Washington Mutual and New Century Financial, were in fact integrated. This study shows that the behavior of these firms critically depended on their corporate governance. We find that poorly monitored executives used their additional control over the integrated businesses to issue low quality loans that supported short‐term growth. Our results suggest that governance is a crucial prerequisite for financial services, particularly for firms whose managers control multiple, interrelated businesses. Copyright © 2015 John Wiley & Sons, Ltd.     

Mortgage Loan Characteristics,Unobserved Heterogeneity and the Performance of United Kingdom Securitized Subprime Loans

We estimate a competing risk model of mortgage terminations on samples of U.K. securitized subprime mortgages. Given the role of these loans in the recent financial crisis it is important to understand their performance and supposed idiosyncratic behavior. We use a flexible modelling of unobserved heterogeneity over several dimensions, controlling for selection issues involving initial mortgage choices and dynamic selection over time. We estimate the characteristics of the unobserved heterogeneity and determine the correlation between the unobserved components of default and prepayment. The paper demonstrates the need to estimate initial household choices and the durations to default or prepayment jointly.     

计算机网络病毒分析和防治

在介绍计算机病毒概念的基础上 ,着重分析了计算机网络病毒的特点 ,提出在网络日益发达的今天如何有效防治计算机网络病毒的方法 ,以确保信息系统安全、可靠地运行。     

清除计算机引导型病毒的通用方法

本文通过 DOS 引导过程分析,结合计算机引导型病毒的特点,给出了一般的引导型病毒的清除方法及实用程序。     

Some Loans Are More Equal than Others: Third–Party Originations and Defaults in the Subprime Mortgage Industry

We show how agency problems between lenders (principals) and third–party originators (TPO; agents) imply that TPO–originated loans are more likely to default than similar retail–originated loans. The nature of the agency problem is that TPOs are compensated for writing loans, but are not completely held accountable for the subsequent performance of those loans. Using a hazard model with jointly estimated competing risks and unobserved heterogeneity, we find empirical support for the TPO/default prediction using individual fixed–rate subprime loans with first liens secured by residential real estate originated between January 1, 1996, and December 31, 1998. We find that apparently equal loans (similar ability to pay, option incentives and term) can have unequal default probabilities. We also find that, initially, the agency–cost risk was not priced. At first, the market did not recognize the higher channel risk, since TPO and retail loans received similar interest rates even though the TPO loans were more likely to default. We also show that this inefficiency was short–lived. As the difference in default rates became apparent, interest rates on TPO loans rose about 50 basis points above otherwise similar retail loans.     

CIH病毒及其防范

重点介绍了 CIH病毒的危害和 7种常用的行之有效的查杀 CIH病毒的实用软件及其下载路径和用法。     

信息武器及计算机病毒技术研究

作为信息对抗研究的重要课题之一,信息武器计算机病毒的研究一直受到各国的重视。计算机病毒具有传染性、潜伏性和巨大的破坏性,其研究是集计算机、编码理论、密码学等于一体的课题之一。本文主要介绍了信息武器的基本分类和计算机病毒的基本结构、分类、传播途径与危害,最后对计算机病毒的新特点进行了总结。     

具有时滞和治疗的丙肝模型分析

为了进一步研究丙型肝炎病毒的传播机理及其治疗的有效方法,针对丙型肝炎病毒潜伏期比较长,且在整个患病期内均具有传染性的特性,在已有的模型基础上引入时滞来反映丙肝潜伏期的存在。为研究时滞和药物治疗对丙肝传染病的影响,建立了具有常数输入和时滞的丙肝传染病模型,利用常微分方程定性理论知识分析其对应平衡点的存在,构造Liapunov函数讨论无病平衡点的全局稳定性,并且分析了时滞对系统的影响。通过分析可知,当时滞大于零且基本再生数小于1时,系统在无病平衡点处是全局渐近稳定的。给出了正平衡点稳定、不稳定与系统产生Hopf分支分别对应的前提条件,通过对阈值的分析给出了控制丙肝传播的措施建议。数值模拟验证了结果的正确性,其结果对具有时滞和治疗的丙肝模型的研究是有意义的,可为减少丙肝的流行提供新的思路。     

两种基因类型的丙肝传染病混合模型的动力学分析

鉴于中国丙肝患者中所含基因类型主要分为2种,且在临床上有急性和慢性之分,为了更好的研究基因类型对丙肝的影响,针对急性和慢性2种基因类型丙肝进行生物数学建模,分析讨论其相应平衡态的存在性及稳定性。结果表明,基本再生数较大的丙肝会长期存在,而基本再生数较小的丙肝会逐渐消亡,当且仅当基本再生数相等时,2种基因类型的丙肝才可能共存。数值模拟分析验证了该结果的正确性。因此,对不同基因类型的患者进行分类治疗是必要的。     

乙型肝炎病毒表位的意义和最新的定量监测方法

PreS1抗原位于乙型肝炎病毒颗粒的外表面,介导病毒-宿主之间的相互作用.是病毒组装和感染侵袭的重要参与因素.对于临床诊断方面的意义在于,它直接反映了血清中HBeAg和HBV DNA的浓度.尤其对HBeAg阴性的病例,有重要的诊断意义.新的荧光定量PCR(FQ-PCR)技术,能够比ELISA技术更快速.灵敏并且能够定量地检测乙型肝炎病毒.将这一技术应用到PreS1基因的检测,将能够一次性检测乙肝病毒的感染数量和复制情况.     

加强包装教育的国际交流与合作

世界发达国家十分重视商品包装，其包装教育也发展很快。如美国是世界上最早实施包装教育的国家，著名的包装教育院校有密西根州立大学(Michigan State University)、康乃尔大学(Comell University)、普拉特学院(Pratt Institute)等。其中，密西根州立大学(Michigan State University)于1952年即创建了包装工程学院(原农     

The NewProd System: The Industry Experience

Robert G. Cooper presents an update on the NewProd model, a new product screening, evaluation and diagnostic tool first described in this journal in 1985. He reviews the model's original development and describes subsequent modifications. Next, he presents validation results from North America and Europe, revealing a predictive ability of 73–84%. An actual case study demonstrates NewProd in use, complete with computer output graphics and analysis.     

为"酷""炫"喝彩--新世代饮料包装解读

饮料不再只是解渴而已，还是饮用者的宣言——选一款包装“酷”“炫”的饮料，等于穿上一件个性化外衣，告诉大家：“我与众不同!”     

浅谈经济增长过程中自然资源制约问题

目前我国宏观经济运行中资源约束矛盾日渐突出,加快建设资源节约型社会已成为当务之急。本文通过分析我国自然资源的现状,指出自然资源对经济发展的正面与负面影响,当资源短缺时,负面的制约作用便逐渐显现出来。目前解决问题的途径是建设节约型社会。文章提出要从认识、法律法规、经济发展的推进途径、技术创新等四个方面做出努力。