 The Probability of Fixed- and Adjustable-Rate Mortgage TerminationRichard A Phillips, Eric Rosenblatt and James VanderHoff The Journal of Real Estate Finance and Economics, 1996, vol. 13, issue 2, 95-104 Abstract: This article analyzes mortgage terminations using a national individual loan data set for the 1986-1992 period. The standard option-choice-theoretic framework is supplemented with variables to proxy for non-option-related termination determinants. Separate multinominal logit models are estimated for three mortgage types: 30-year FRMs, 15-year FRMS, and 30-year ARMs. The results indicate substantial differences in the response of the mortgage types to variables included in the model. FRM15 prepayments are the most responsive to prepayment option values: FRM30 prepayments are less responsive to option values and are driven by local area housing market and economic conditions; ARM prepayment rates are higher but default rates are lower relative to the FRMs. A noteworthy finding is that teaser discounts reduce the likelihood of ARM defaults. Copyright 1996 by Kluwer Academic Publishers Date: 1996 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kap:jrefec:v:13:y:1996:i:2:p:95-104 Ordering information: This journal article can be ordered from Access Statistics for this article The Journal of Real Estate Finance and Economics is currently edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans More articles in The Journal of Real Estate Finance and Economics from Springer |
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