A Note on Mortgage Risk: Default vs. Loss Rates

This note reexamines the role of the loan-to-value ratio on mortgage risk. Whereas previous studies have focused on the default rate as a function of this term, this study considers the additional effect on the loss rate of defaulted loans. Because the dollar loss per amount originated is the product of the default rate and the loss rate on defaulted loans, the impact of the loan-to-value ratio on both the default and loss rates is crucial to explaining the impact of the loan-to-value ratio on mortgage risk. I find that both rates are significantly positively related to loan-to-value ratio and that the loss rate accounts for between 13% and 20% of total loan-to-value impact.     

Marketing thought in American Decorative Arts

The field of American Decorative Arts, in an effort to place objects within their broader cultural context, has investigated surviving business records from the period 1760–1840. This research contributes to marketing thought by documenting early marketing problems and practices including insufficient consumer demand, global competition, attempts at demand stimulation, and emerging channels of distribution.     

Exact sampling distribution of the omitted variable estimator

In the context of stochastic regressors, the exact sampling distribution of the omitted variable estimator is derived. The result is then used for comparison with the non-stochastic case.     

Leadership and management effectiveness: A multi-frame,multi-sector analysis

Bolman and Deal (1984, 1991) have developed four perspectives, or frames, for understanding organizations and leadership: structural, human resource, political, and symbolic. This paper reports two studies that operationalize that model. The first study uses critical incidents written by managers to assess how many and which frames they use. Most incidents show the use of one or two frames; very few contain all four. In every population, the structural frame was used frequently while the symbolic frame was rarely evident. Across different populations, the use of the human resource and political frames varied substantially. The second study used survey instruments to assess managers' frame orientations. Regression analyses show that their orientations, as perceived by colleagues, are differentially related to perceived effectiveness as manager and leader. Managerial effectiveness is related to an emphasis on rationality and organizational structure. Leadership effectiveness is linked to symbols and culture. For men and women in comparable positions, gender is unrelated to leadership orientations or to their effectiveness as managers or leaders.     

Pitfalls in the theory of fairness—Comment

In short, if distributional equity is the goal then egalitarian equivalence may lead in an interesting but divergent direction.     

The Impact of Interstate Foreclosure Cost Differences and the Value of Mortgages on Default Rates

Previous research on mortgage default has focused on the costs, benefits, and characteristics of the mortgagor. In such studies default rates have been taken as a measure of mortgage risk. In this paper we present a model where the position of the lender affects the default-foreclosure process. Important to the lender's decision to foreclose rather than renegotiate an existing loan are the value of mortgage and the legal costs associated with foreclosure.
The empirical evidence supports the hypothesis that both the value of the mortgage and legal foreclosure costs affect the foreclosure rate. In those states where legal foreclosure costs are high rates are significantly less than where costs are low. This suggests that previous models which include only the costs and benefits of default to the borrower are incomplete and that foreclosure rates can not be taken as a strict measure of mortgage risk. That is, low foreclosure rates may indicate that losses occur in other forms of loan negotiation rather than in expensive legal costs.