tailieunhanh - Lecture Money and capital markets: Financial institutions and instruments in a global marketplace (8th edition): Chapter 24 - Peter S. Rose

Chapter 24 - The residential mortgage market. In this chapter, you will learn to understand how the residential mortgage market supplies credit for individuals and families to build and buy homes; to understand the problems faced by lenders in designing new home loan contracts that will protect them against inflation and other risks. | Money and Capital Markets 24 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Residential Mortgage Market Learning Objectives To understand how the residential mortgage market supplies credit to build and buy homes. To learn about the problems faced by families and individuals in finding credit to finance the purchase of their homes. To see the problems faced by lenders in designing new home loan contracts that will protect them against inflation and other risks. Learning Objectives To look at how federal government agencies and government-sponsored mortgage firms support the development of the market for mortgage loans. Introduction Among the fastest growing of all financial markets today is the residential mortgage market, where individuals and families fund their purchases of homes. Originally a simple market that was primarily local and regional in character, the . | Money and Capital Markets 24 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Residential Mortgage Market Learning Objectives To understand how the residential mortgage market supplies credit to build and buy homes. To learn about the problems faced by families and individuals in finding credit to finance the purchase of their homes. To see the problems faced by lenders in designing new home loan contracts that will protect them against inflation and other risks. Learning Objectives To look at how federal government agencies and government-sponsored mortgage firms support the development of the market for mortgage loans. Introduction Among the fastest growing of all financial markets today is the residential mortgage market, where individuals and families fund their purchases of homes. Originally a simple market that was primarily local and regional in character, the residential mortgage market has become an international capital market where home-mortgage-related instruments are traded around the globe. Recent Trends in New Home Prices and the Terms of Mortgage Loans Average Terms Quoted on Conventional Home Mortgage Loans (. Primary Market) 1974 1980 1990 2000 Purchase price ($000) $ $ $ $ Amount of loan ($000) Loan/price ratio (%) Maturity (years) Fees & charges (points) % % % % Contract interest rate (%) FHA mortgage yield (%) * * FHA mortgage yield is for 1999. Data Source: Board of Governors of the Federal Reserve System, The Structure of the Mortgage Market Data Source: Board of Governors of the Federal Reserve System Outstanding Mortgage Loans in the . $ billions Total Mortgage Debt Residential Properties (1-4 family & multifamily) Nonresidential Properties (commercial & farm) The