Purpose The framework of this paper is financial mathematics and, more specifically, the control of data fraud and manipulation with their subsequent economic effects, namely, in financial markets. ...The purpose of this paper is to calculate the global loss or gain, which supposes, for the borrower, a change of the interest rate while the contracted loan is in force or, in another case, the loan has finished. Design/methodology/approach The methodology used in this work has been, in the first place, a review of the existing literature on the topic of manipulability and abusiveness of the loan interest rates applied by banks; in the second place, the introduction of a mathematical-financial analysis to calculate the interests paid in excess; and, finally, the compilation of several sentences issued on the application of the so-called mortgage loan reference index (MLRI) to mortgage loans in Spain. Findings There are three main contributions in this paper. First, the calculation of the interests paid in excess in the amortization of mortgage loans referenced to an overvalued interest rate. Second, an empirical application shows the amount to be refunded to a Spanish consumer when amortizing his/her mortgage loan referenced to the MLRI instead of the Euro InterBank Offered Rate (EURIBOR). Third, consideration has been made to the effects and the possible solutions to the legal problems arising from this type of contract. Research limitations/implications This research is a useful tool capable of implementing the financial calculation needed to find out overpaid interests in mortgage loans and to execute the sentences dealing with this topic. However, a limitation of this study is the lack of enough sentences on mortgage loans referenced to the MLRI to get some additional information about the number of borrowers affected by these legal sentences and the amount refunded by the financial institutions. Originality/value To the best of the authors’ knowledge, this is the first time that deviations in the payment of interests have been calculated when amortizing a mortgage.
•The study investigates the impact of higher Fed funds rates on mortgage lending of U.S. banks.•Results indicate that higher Fed funds rates cannot control mortgage lending of U.S. banks during high ...inflation rate and high house sales prices in absence of reserve requirements.•Instead, higher Fed funds rates seem to further increase both the mortgage loan to total loan ratio and the absolute amount of mortgage loans – which is the opposite of what the Fed intends to reach with a higher Fed funds rate.•Against the backdrop that the Fed cannot effectively control mortgage lending, the recent sharp decline in house prices has the potential to unleash a new financial crisis.
The U.S. is facing higher inflation since December 2020 along with higher house prices. After a sharp increase, house prices have started to decline very recently even more drastically – reminding us of the global financial crisis 2007–08. Rather late, from December 2021 onwards, the Fed started to increase the Fed funds rate. However, it is unclear whether the Fed funds rate can control bank lending activities – especially, mortgage lending. Surprisingly, our results suggest that the Fed funds rate fails to control mortgage lending during high inflation and high house prices in the absence of bank reserve requirements.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Purpose This study aims to address the critical need for innovative financing solutions in the global housing sector, focusing specifically on Malaysia’s distinct housing finance system encompassing ...both conventional and Islamic loans. The primary objective is to develop a transformative housing finance model that addresses affordability challenges and reshapes the Malaysian housing landscape. Design/methodology/approach The study presents an alternate housing finance model for Malaysia, integrating lower monthly payments and reduced household debt. Key variables include house price appreciation rates, interest rates, initial guarantee fees and loan-to-value ratios. Inspired by the Help to Buy (HTB) scheme, the model aligns with proven global initiatives for enhanced affordability, balancing payment amounts, loan interest rates and acceptable price thresholds. Findings The study’s findings promise to address affordability disparities and reshape Malaysia’s housing finance landscape. The emphasis is on introducing a structured repayment plan that offers a sustainable path to homeownership, particularly for low-income families. Incorporating the future value adaptation concept, inspired by reverse mortgages and Islamic finance, enhances adaptability, ensuring long-term sustainability despite economic shifts. Practical implications The proposed model promotes widespread access to homeownership, offering practical solutions for policymakers to improve affordability, prompting adaptable risk management strategies for financial institutions and empowering potential homebuyers with increased flexibility. Originality/value The study introduces a transformative housing finance model for Malaysia, merging elements from reverse mortgages, Islamic finance and the HTB scheme, offering potential applicability to similar systems globally.
Sustainable and ethical leadership in the financial industry expand in importance since the financial crisis of 2007-2009. This research examined the level of sustainable and ethical leadership of ...leaders in mortgage loan originator (MLO) organizations, as perceived by loan originators. The Perceived Leadership Survey (PLIS) developed by Craig and Gustafson (Leadersh Q 9(2): 127-145, 1998) and the Sustainable Leadership Questionnaire (SLQ) developed by McCann and Holt (Int J Sustain Strat Manage 2(2):204-210, 2011) were utilized for this research. The survey results yielded high levels of both ethical and sustainable leadership. Employees also felt their leadership was encouraging ethical and sustainable behavior. However, correlations between the PLIS and SLQ did not prove to be dependent or closely correlated.
The main purpose of this study is to investigate the influence of hotel brand affiliation on commercial mortgage loan underwriting. Using a sample of 2443 hotel loans securitized into commercial ...mortgage-backed securities (CMBS) between 2010 and 2018, the results of this study show a significant effect of hotel brand affiliation on credit spreads, loan-to-value (LTV) and debt coverage ratios (DSCR). More importantly, there is a significant interaction effect between hotel brand and lending on credit spreads. The evidence is consistent with the observation that some hotel brands are less risky than other hotel brands, and therefore, receive favorable lending terms from lenders.
•Marriott, Hilton, Intercontinental have lower credit spreads than other hotel parent companies.•Hampton Inn, Holiday Inn Express, Hilton Garden Inn, and Courtyard have lower credit spread than other hotel brands.•Positive relationship between loan-to-value ratio (LTV) and credit spreads•Debt coverage ratio (DSCR) has a negative influence on credit spreads•Brand affiliated hotels have higher LTVs and lower DSCRs than independent hotels
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
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