Loan Loss Severity of Agricultural Mortgages

Allen Featherstone and Christian R. Boessen

Review of Agricultural Economics, 1994, vol. 16, issue 2, 249-258

Abstract: The establishment of the Federal Agricultural Mortgage Corporation (Farmer Mac) has increased the need for detailed performance data on yield, prepayment, and default for agricultural real estate mortgages. This study derives and applies a model for estimating the loan loss severity and default premium required for underwriting agricultural real estate mortgages. The estimated loan loss severity on a nationwide pool of defaulted mortgages is 4.7 percent. On all but 6 percent of 457 defaulted mortgages, the original principal balance was recovered. Combining loan loss severity results with the frequency of default suggests that for the 20-year period from 1966 to 1985, the yield loss from defaulted agricultural mortgages was 29 basis points. For the 10-year period from 1976 to 1985, the yield impact was 46 basis points.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.2307/1349467 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:revage:v:16:y:1994:i:2:p:249-258.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

More articles in Review of Agricultural Economics from Agricultural and Applied Economics Association Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ( this e-mail address is bad, please contact ) and Christopher F. Baum ().