Reverse mortgage decision-making

Reverse mortgages have been suggested as a promising financial tool to help low-income older homeowners who want to remain in their houses. However, actual use of this option has been much below early estimates of potential demand. This study explored response to the new option through open-ended interviews of homeowners who had received reverse mortgage counseling. Decision-making was influenced by attachment to home, family input, and financial attitudes, including desire to leave a legacy. In general, homeowners took reverse mortgages only as a "last resort" that enabled them to maintain their independence.     

On Home Equity Conversion Mortgages for Elderly Homeowners

Analysis of reverse mortgage plans for elderly homeowners indicates that the compound interest charged by the lenders would capture more than half of the equity of the homeowners. The lenders further ask that the Federal Housing Administration (FHA) insure them against risks of unexpected longevity of the borrowers, creating an inderterminate risk to FHA.     

Embeddedness and capital markets: Bank financing of businesses

The article examines the social and economic dimensions of capital markets, particularly the effects of bank and capital market structure; lending criteria and bank policies; and demand for credit, on bank financing of businesses. A critical problem in most capital markets is that lenders have inadequate information to assess the risk and creditworthiness of loan applicants. We find that many bankers continue to use assessments of character as a signal of the potential borrower's creditworthiness. Banking deregulation limits the range of signals available to lenders and therefore may have detrimental consequences for banks and local economies.     

Closing the Wealth Gap: A Review of Racial and Ethnic Inequalities in Homeownership

Homeownership plays an important role in the socioeconomic well‐being of Americans. Despite recent major losses in wealth due to the subprime market crash, home equity remains the largest source of wealth for the average American family. A marker of class status, owning one's home provides access to neighborhoods with the best schools, quality public services, and lowest crime. This article demonstrates that minorities have not had the same access to homeownership that Whites have, and this contributes to continuing socioeconomic disparities between Whites and minorities. This article explores the homeownership experience of Blacks – including African‐Americans, Caribbeans, and Africans – Hispanics, and Asians in the United States relative to non‐Hispanic Whites. Minorities rely heavily on homeownership and home equity as the key component of their wealth and remain less likely than Whites to hold alternative forms of investment such as stocks. The role that homeownership plays in perpetuating intergenerational wealth disparities between Whites and minorities is discussed as are challenges to minority homeownership such as the pervasiveness of risky mortgage products. Exploring the racial gap in homeownership is fundamental to understanding racial inequalities and formulating strategies and policies to help close such disparities. This article concludes with suggestions for future research.     

Credit and Credibility: Homeownership and Identity Management in the Midst of the Foreclosure Crisis

This article explores how homeowners threatened with foreclosure attribute responsibility for their troubles and manage the stigma of mortgage default. In light of widespread home loss, at‐risk owners develop an understanding of the crisis as a collective experience and yet still experience stigma and employ identity management techniques to construct themselves as responsible homeowners. Based on interviews and fieldwork, this article explores the tension between collective and individual responsibility and the implications of this attribution for identity.     

Exiting or retaining owner-occupied housing in the United States 1999–2009: How do social programs matter?

This research examines exits from homeownership in the United States between 1999 and 2009 using data from the Panel Study of Income Dynamics. We first document the extent to which homeowners exited owned housing (to a rental unit or a rent-free unit) during that time period. Second, we examine how socio-demographic characteristics, housing characteristics, debt levels, and receipt of public and private transfers are associated with exiting (or retaining) homeownership, with a particular focus on whether transfers counteract earnings decreases and/or housing cost increases to assist homeowners in retaining their homes. We also investigate whether these associations differ for several subgroups of homeowners defined by their location in the income distribution and race. Findings from regression models that include individual, year, and state fixed effects highlight the role of both labor markets and housing markets in influencing exits from homeownership. More generous and universal public transfers (such as OASDI) appear to help owners retain homes, whereas less generous and means-tested transfers do not. At the same time, the influences of universal transfers on retaining a home are small in magnitude compared to those of decreases in earnings and home values as well as increases in payment-to-income and consumer debt-to-income ratios.     

The Effects of Homeownership on Civic Participation among Immigrant Farmworkers in Washington State

Homeownership is generally considered to have positive benefits for families and communities. However, the collapse of the housing market in 2009 led to questions about this assumption, especially for low‐skilled workers whose employment is volatile. This question is particularly relevant to the farmworker population in rural communities for whom homeownership might function as the first step in the path toward social integration. In this study I ask whether homeownership impacts immigrant adaptation among farmworkers in Washington State. To answer this question researchers analyzed 2,845 responses from the Washington State Farm Worker Survey. I divided the sample into renters and homeowners and evaluated behaviors and attitudes along three dimensions: perceptions of community efficacy, civic engagement, and motivations for civic engagement. I found that when compared with those who rent, farmworkers who are homeowners tend to have a greater sense of community efficacy, are more engaged in their communities, and are more motivated to get involved in local affairs. These findings suggest that homeownership can function as a vehicle for immigrant adaptation among Washington State farmworkers. This bodes well for the future of the state's rural areas, where Latinos are increasingly becoming the majority in many agricultural communities.     

Social Work in the Campaign Against Predatory Consumer Financing: An Interview with Shawna Reeves

Subprime mortgages and related financial fraud triggered the United States economy's meltdown and Great Recession of 2007. In this interview, Eve Ekman engages Shawna Reeves, a social worker who is carving out a career in protecting elders from deceptive mortgage deals and other personal finance scams. Reeves describes her own professional path, connects direct practice and policies for reform, and encourages young social workers to take up this challenging field that is at once as new as the recent deregulation of the finance industry and as venerable as Hull House.     

Does Housing Counseling Change Consumer Financial Behaviors? Evidence from Philadelphia

Pre-purchase homeownership counseling is a social service for low- to moderate-income households intent on becoming first-time homeowners. Despite the record number of low- and moderate-income households achieving first-time homeownership over the past decade, there is little research on housing counseling’s effectiveness, in terms of long-term positive financial behaviors. In addition, the research community has traditionally adhered to a proscribed definition of success within programs, which hinders evaluative efforts. This paper examines whether counseled borrowers have experienced financial behavior changes within 5 years after having purchased a home. There were mixed results regarding overall financial behavior changes. Agency identity had little influence on some counselees’ behaviors, while counseling agency characteristics had some limited effects on client behaviors.     

Housing Cost Burden and Marital Satisfaction

This study assessed the relationship between housing burden ratios and marital satisfaction. We also examined whether economic pressure might mediate this association and whether housing satisfaction would moderate it. Using existing data from the National Survey of Families and Households (n = 5,109 participants), results suggested that participants' housing burden ratio was negatively associated with marital satisfaction. Among homeowners, having a paid-off home mortgage was positively associated with marital satisfaction. These relationships were fully mediated by feelings of economic pressure. Although housing satisfaction was positively associated with marital satisfaction, it did not mediate the association between participants' housing burden ratio and their reported marital satisfaction.     

Mastery,Homeownership, and Adult Roles During the Transition to Adulthood

We investigate the relationship between homeownership and personal sense of mastery in the transition to adulthood and examine whether three important adult transitions (employment, marriage/cohabitation, and parenthood) moderate the impact of homeownership on mastery. Utilizing the National Longitudinal Survey of Youth—Young Adult Sample (N = 1,609), we estimate change models to assess the direct effects of homeownership on mastery as well as whether this impact is modified by the transition to adult roles. Homeownership increases the sense of mastery among young adults. Homeowners who are unemployed paradoxically receive a boost to mastery not experienced by those who are employed, and homeowners who are parents experience increased mastery, compared to those who do not have children. Owning a home has a positive influence on young adults' sense of mastery during a period when their mastery is in flux and they are accumulating new roles.     

网摘

“如今,在北京、上海等大城市,‘房奴’的数量日益增多。尽管为还房贷我节衣缩食,可是我的内心却有一种‘我是房奴我光荣’的感觉。     

Race,Mortgage Lending and Loan Rejections in a U.S. City

Abstract

The negative effect of neighborhood racial composition on mortgage lending has been documented in recent years in several cities, even after controlling for income, condition of housing and related neighborhood and housing characteristics. Lending industry officials maintain that the racial distribution of mortgage lending is the unintended consequence of profit-based lending activities. In contrast, community activists and civil rights groups claim that racial discrimination is the motivating force underlying mortgage lending practices. Data from the 1991 Home Mortgage Disclosure Act (HMDA) for the Kansas City metropolitan area are used to measure trends in mortgage lending and loan rejection ratios by local lenders. This study finds that Kansas City lenders reject minority applicants at higher rates than whites and reject high-income minorities as often as low-income whites. More importantly, results show that high-income African Americans are rejected at a higher rate than low-income whites, indicating that race of loan applicants plays a crucial role in the decision to approve a mortgage loan, even after controlling for income and other factors. Findings from Kansas City and other cities indicate that the low percentage of minority loan applications from some lenders suggests not only meager marketing, but possible pre-screening of minority applicants where they are discouraged from completing an application form.     

Race and Wealth: A Demographic Analysis of Black Homeownership*

Historically, the rate of black homeownership has been low compared to nonblacks. The purpose of this study is to assess the extent to which levels of black homeownership are determined by selected social factors and racial discrimination. The findings reveal that blacks are less likely to be homeowners in nearly every sociodemographic category. The one exception is the finding that elderly blacks are more likely than blacks and nonblacks in all other age categories to be homeowners.     

Reverse Mortgage Fraud Against Seniors: Recognition and Education of a Burgeoning Problem

With the senescent population and the popularity of aging in place, many seniors are attracted to reverse mortgages to plan for retirement and to maintain their existing housing situation. Although theoretically reverse mortgages represent a viable investment product for those considering retirement, several pitfalls are possible for seniors, who can be unsuspecting victims of fraud. This article provides information detailing the etymology of fraud activities within this market through a storyboard that depicts the various stages of the fraud process. It is hoped that such a tool can enhance the education of consumers on this mortgage product.     

RACIAL DIFFERENCES IN HOMEOWNERSHIP and HOUSING WEALTH, 1970–1986

Black couples are found to own a disproportionately low share of aggregate housing wealth in the United States because they are less likely than whites to be homeowners and because black-owned houses have lower market values than white-owned houses. Probability of ownership and house value equations (corrected for selectivity bias) are estimated with national data for 1970, 1980, and 1986. Trends in racial differences in homeownership and house value are identified and reasons for their existence are investigated.     

Effect of mortgage indebtedness on health of U.S. homeowners

This paper examines the effect of excessive mortgage indebtedness on health among homeowners using nine waves of the Health and Retirement Study from 1992 to 2008. Health status is measured by subjective well-being, number of depressive symptoms, and incidence of hypertension. Using average annual state-level home prices as an instrument, we attempt to identify the causal effect in an panel IV framework. Results from the panel IV estimations suggest that having a high mortgage loan to home value (LTV), defined as LTV at or above 80 %, leads to more depressive symptoms and a higher incidence of hypertension, but has no effect on subjective well-being. Since the results from panel estimations did not show that debt affects health, whether the panel IV results demonstrate a causal relationship depends critically on the exclusion assumption.     

Taking a risk? The mortgage industry and perceptions of disabled people

This paper examines a relatively overlooked force within disability; the appraisal of risk, with a specific focus on disability and housing. In this context the paper explores how risk can operate against disabled people, using a case study of mortgage industry responses to disabled people in the mortgage application process. Given the recent downward shift in the buoyancy of the housing market this is a timely focus. The events in the USA, which led to the sub‐prime market ‘collapse’, and the consequent impact on the UK have meant that lenders have become even more risk averse, withdrawing numerous mortgage products and reducing loan amounts. This has left many people unable to access the owner‐occupier sector, but for disabled people this can be even more difficult. The role of risk in ‘the disabling process’ is therefore of great importance, and is illustrated here through the practice of risk assessment.     

Unlocking Housing Equity for Pensions in Urban China

This article examines the extent to which a reverse mortgage may improve the income of an elderly household. This question is analyzed in the context of an aging society where the existing Confucian contract of filial piety has been eroding with the advent of economic and demographic transitions underway in contemporary China. We use data from a China Household Finance Survey that was administered in 2011 covering 949 elderly households from 22 provinces. We use models from the literature to calculate the incremental gains to income from the use of a reverse mortgage. The findings are revealing in terms of the potential gains from the use of reverse mortgages. On average, an elderly homeowner makes a monthly mortgage payment of RMB ¥1,383; a reverse mortgage for the same household raises monthly income by RMB ¥1,388 or 29%. The major beneficiaries of a reverse mortgage are single and elderly individuals possessing significant housing equity and living in the more developed regions. Overall, the reverse mortgage provides a means for society to allow the elderly access to income without being a burden on the state.     

美国离岸金融及其对人民币国际化的启示

美元真正取代英镑成为国际储备货币,这主要取决于美元的稳定性、美国的经济实力和金融市场发展的成熟。而美元离岸市场的发展,更促进了美元作为一种主导型的国际储备货币,在国际贸易和金融交易中发挥主导作用。人民币要成为一种国际性货币,中国就必须要有一个开放性的、发展很广很深的、流动性很好的金融市场,这样才能保证人民币成为一种国际性货币。人民币国际化,主要是交易结算发展的过程,其次是人民币境外市场发展的过程。现在最主要的还是增加跨境人民币的流动性,对人民币从境外流向境内的控制可以谨慎一点;但境内人民币流向境外对境内的冲击要小,所以可以放得更宽一点。在这种情况下,最好的模式就是通过自贸区来发展,把一些管制的措施放得更快、更广。