Frictions, Heterogeneity and Optimality in Mortgage Modeling

The purpose of this article is to provide a unified framework for incorporating frictions into a theoretical options-pricing model (OPM) for mortgages. This article presents formulation for a frictions-adjustable mortgage model that integrates borrower heterogeneity while simultaneously preserving prepayment and default financial decisions. Our model demonstrates the flexibility of the OPM by simulating separate and concurrent effects of three categories of frictions on the mortgage and mortgage components. Researchers can use our example formulation to determine the effects of specific borrower characteristics on mortgage values without destroying the options theoretic framework.     

State-of-the-art of Russia’s heat supply systems

The paper overviews the contemporary state of Russia’s heat supply systems and fuel consumption within its centralized part, the structure of heat consumption by economic sectors and types of industrial consumers. As shown, the centralized heat supply systems, providing the major part of country’s economy with low temperature heat, have heat losses and accident rate at a critical level. The state of decentralized heat supply systems of low rise buildings is not covered by national statistics at all. A second paper on the prospects and development of Russia’s heat supply systems will be published in a subsequent issue.     

An Analysis of Third Party Consumer Complaint Handling Mechanisms: The Hawaii Office of Consumer Protection

This paper presents a preliminary analysis of third party complaint handling mechanisms, based on data obtained from the Hawaii Office of Consumer Protection. Specifically, the study focuses on the types of complaints processed by the Agency, the factors which affect the redress received by consumers and the length of investigation time.