Why Do Borrowers Make Mortgage Refinancing Mistakes

Author : Sumit Agarwal
Publisher : Unknown
Page : 46 pages
File Size : 42,9 Mb
Release : 2015
Category : Electronic
ISBN : OCLC:1308391166

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Why Do Borrowers Make Mortgage Refinancing Mistakes? by Sumit Agarwal Pdf

Refinancing a mortgage is often one of the biggest and most important financial decisions that people make. Borrowers need to choose the interest rate differential at which to refinance and, when that differential is reached, they need to take the steps to refinance before rates change again. The optimal differential is where the interest saved by refinancing equals the sum of refinancing costs and the option value of refinancing. Using a unique panel data set, we find that approximately 59% of borrowers refinance sub-optimally - with 52% of the sample making errors of commission (choosing the wrong rate), 17% making errors of omission (waiting too long to refinance), and 10% making both errors. Financially sophisticated borrowers make smaller mistakes, refinancing at rates closer to the optimal rate and waiting less after mortgage rates reach the borrowers' trigger rates. Evidence suggests borrowers learn from their refinancing experiences as they make smaller mistakes on their second refinancing than on their first one.

Author : Sumit Agarwal,Richard J. Rosen,Vincent Yao
Publisher : Unknown
Page : 48 pages
File Size : 50,7 Mb
Release : 2013-11-04
Category : Electronic
ISBN : 1457849445

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Why Do Borrowers Make Mortgage Refinancing Mistakes? by Sumit Agarwal,Richard J. Rosen,Vincent Yao Pdf

Author : Sumit Agarwal,Wenlan Qian,Ruth Tan
Publisher : Springer Nature
Page : 352 pages
File Size : 46,6 Mb
Release : 2020-10-07
Category : Business & Economics
ISBN : 9789811555268

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Household Finance by Sumit Agarwal,Wenlan Qian,Ruth Tan Pdf

Household finance studies is a relatively recent field, exploring a growing understanding of how households make financial decisions relating to the functions of consumption, payment, risk management, borrowing and investing; how institutions provide goods and services to satisfy these financial functions of households; and how interventions by firms, governments and other parties affect the provision of financial services. This timely book analyses existing findings about household behavior as well as findings related to policy interventions. With international case studies, this book reviews a topic of global importance and brings a crucial up-to-date survey of the field for researchers and postgraduate students.

Author : Richard K. Green
Publisher : Academic Press
Page : 249 pages
File Size : 44,6 Mb
Release : 2013-11-21
Category : Business & Economics
ISBN : 9780124045934

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Introduction to Mortgages and Mortgage Backed Securities by Richard K. Green Pdf

In Introduction to Mortgages & Mortgage Backed Securities, author Richard Green combines current practices in real estate capital markets with financial theory so readers can make intelligent business decisions. After a behavioral economics chapter on the nature of real estate decisions, he explores mortgage products, processes, derivatives, and international practices. By focusing on debt, his book presents a different view of the mortgage market than is commonly available, and his primer on fixed-income tools and concepts ensures that readers understand the rich content he covers. Including commercial and residential real estate, this book explains how the markets work, why they collapsed in 2008, and what countries are doing to protect themselves from future bubbles. Green's expertise illuminates both the fundamentals of mortgage analysis and the international paradigms of products, models, and regulatory environments. Written for buyers of real estate, not mortgage lenders Balances theory with increasingly complex practices of commercial and residential mortgage lending Emphasizes international practices, changes caused by the 2008-11 financial crisis, and the behavioral aspects of mortgage decision making

Author : Katrin B. Anacker,Mai Thi Nguyen,David P. Varady
Publisher : Routledge
Page : 548 pages
File Size : 40,7 Mb
Release : 2019-07-02
Category : Architecture
ISBN : 9781317282693

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The Routledge Handbook of Housing Policy and Planning by Katrin B. Anacker,Mai Thi Nguyen,David P. Varady Pdf

The Routledge Handbook of Housing Policy and Planning provides a comprehensive multidisciplinary overview of contemporary trends in housing studies, housing policies, planning for housing, and housing innovations in the United States, the United Kingdom, and Continental Europe. In 29 chapters, international scholars discuss aspects pertaining to the right to housing, inequality, homeownership, rental housing, social housing, senior housing, gentrification, cities and suburbs, and the future of housing policies. This book is essential reading for students, policy analysts, policymakers, practitioners, and activists, as well as others interested in housing policy and planning.

Author : Klaus Mathis,Avishalom Tor
Publisher : Springer Nature
Page : 327 pages
File Size : 40,9 Mb
Release : 2021-04-24
Category : Law
ISBN : 9783030705305

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Law and Economics of Regulation by Klaus Mathis,Avishalom Tor Pdf

This book explores current issues regarding the regulation of various economic sectors, theoretically and empirically, discussing both neoclassical and behavioural economics approaches to regulation. Regulation has become one of the main determinants of modern economies, and virtually every sector is subject to general laws and regulations as well as specific rules and standards. A traditional argument to justify regulatory interventions is the promotion of public interests. Fixing markets that lack competition, balancing information asymmetries, internalising externalities, mitigating systemic risks, and protecting consumers from irrational behaviour are frequently invoked to complement the invisible hand of the market with the visible hand of the state.However, regulations can lead to unintended consequences, and serve the interests of powerful private interest groups rather than the public interest and social welfare. In addition, new insights from behavioural economics question the traditional regulatory approaches, most prominently in attitudes towards consumers. Furthermore, digitalisation and technological innovation in general present new challenges in terms of both the type of regulation and the regulatory process.Part I of this book discusses various theoretical approaches to the economic analysis of regulations, while Part II looks at specific applications of the law and economics of regulation.

Author : Gilles Hilary,David McLean
Publisher : Edward Elgar Publishing
Page : 463 pages
File Size : 54,6 Mb
Release : 2023-08-14
Category : Business & Economics
ISBN : 9781802204179

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Handbook of Financial Decision Making by Gilles Hilary,David McLean Pdf

This accessible Handbook provides an essential entry point for those with an interest in the increasingly complex subject of financial decision making. It sheds light on new paradigms in society and the ways that new tools from private actors have affected financial decision making. Covering a broad range of key topics in the area, leading researchers summarize the state-of-the-art in their respective areas of expertise, delineating their projections for the future.

Author : Oren Bar-Gill
Publisher : Oxford University Press
Page : 297 pages
File Size : 47,7 Mb
Release : 2012-08-23
Category : Business & Economics
ISBN : 9780199663361

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Seduction by Contract by Oren Bar-Gill Pdf

Seduction by Contract explains how consumer contracts emerge from market forces and consumer psychology. Consumers' predictable mistakes - they are short-sighted, optimistic, and imperfectly rational - compel sellers to compete by hiding the true costs of products in complex, misleading contracts. Only better law can overcome the market's failure.

Author : Venezia Itzhak
Publisher : World Scientific
Page : 396 pages
File Size : 51,7 Mb
Release : 2016-10-27
Category : Business & Economics
ISBN : 9789813100107

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Behavioral Finance by Venezia Itzhak Pdf

This unique volume presents new original research exploring factors that lead to investors behavioral biases. It discusses how features such as professionalism, sophistication, gender, media, and culture influence investors' decision-making in general, and in particular, how they generate (or limit) behavioral and cognitive biases. The effects of these factors on capital markets are also discussed. The book is based on the discussions and presentations at the First Israel Behavioral Finance Conference, which took place in Tel Aviv in May 2015. It examines in greater detail some of the key issues discussed at the conference. This is an innovative book in behavioral finance: it is the first to present an extensive collection of papers which discuss a comprehensive array of factors that influence or define investor character and analyzes these factors' effects on financial markets. The book is useful for readers interested in understanding the factors that influence investors' profiles and thus their behavioral biases. The book will be of great interest to researchers and students seeking a reference book which contains timely research on these areas of behavioral finance.

Author : Meir Statman
Publisher : Oxford University Press
Page : 396 pages
File Size : 40,7 Mb
Release : 2017-04-03
Category : Business & Economics
ISBN : 9780190626495

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Finance for Normal People by Meir Statman Pdf

Finance for Normal People teaches behavioral finance to people like you and me - normal people, neither rational nor irrational. We are consumers, savers, investors, and managers - corporate managers, money managers, financial advisers, and all other financial professionals. The book guides us to know our wants-including hope for riches, protection from poverty, caring for family, sincere social responsibility and high social status. It teaches financial facts and human behavior, including making cognitive and emotional shortcuts and avoiding cognitive and emotional errors such as overconfidence, hindsight, exaggerated fear, and unrealistic hope. And it guides us to banish ignorance, gain knowledge, and increase the ratio of smart to foolish behavior on our way to what we want. These lessons of behavioral finance draw on what we know about us-normal people-including our wants, cognition, and emotions. And they draw on the roles of these factors in saving and spending, portfolio construction, returns we can expect from our investments, and whether we can hope to beat the market. Meir Statman, a founder of behavioral finance, draws on his extensive research and the research of many others to build a unified structure of behavioral finance. Its foundation blocks include normal behavior, behavioral portfolio theory, behavioral life-cycle theory, behavioral asset pricing theory, and behavioral market efficiency.

Author : Cait Lamberton,Derek D. Rucker,Stephen A. Spiller
Publisher : Cambridge University Press
Page : 873 pages
File Size : 48,5 Mb
Release : 2023-04-06
Category : Psychology
ISBN : 9781009243940

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The Cambridge Handbook of Consumer Psychology by Cait Lamberton,Derek D. Rucker,Stephen A. Spiller Pdf

In the last two years, consumers have experienced massive changes in consumption – whether due to shifts in habits; the changing information landscape; challenges to their identity, or new economic experiences of scarcity or abundance. What can we expect from these experiences? How are the world's leading thinkers applying both foundational knowledge and novel insights as we seek to understand consumer psychology in a constantly changing landscape? And how can informed readers both contribute to and evaluate our knowledge? This handbook offers a critical overview of both fundamental topics in consumer psychology and those that are of prominence in the contemporary marketplace, beginning with an examination of individual psychology and broadening to topics related to wider cultural and marketplace systems. The Cambridge Handbook of Consumer Psychology, 2nd edition, will act as a valuable guide for teachers and graduate and undergraduate students in psychology, marketing, management, economics, sociology, and anthropology.

Author : Roberto G. Quercia,Allison Freeman,Janneke Ratcliffe
Publisher : Rowman & Littlefield
Page : 178 pages
File Size : 45,5 Mb
Release : 2011-07-27
Category : Business & Economics
ISBN : 9780815721734

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Regaining the Dream by Roberto G. Quercia,Allison Freeman,Janneke Ratcliffe Pdf

Millions of Americans have lost their homes since the start of the recession initiated by the financial crisis of 2008–09. But is the dream of homeownership for America's working families obsolete, an aspiration from a bygone era? Regaining the Dream rejects that notion and proposes a way to strengthen the financial system while simultaneously promoting an equitable and viable American homeownership policy. For the first time, the authors of Regaining the Dream offer data-driven evidence on how the mortgage industry can serve working families in the United States, pointing the way to a pragmatic housing policy that promotes the opportunity for sustainable homeownership. Taking the reader step by step through the lending crisis and what caused it, the authors include useful and clear definitions of terms heard almost daily in news coverage. And they give a fair account of the history behind Fannie Mae and Freddie Mac and the new Dodd-Frank law, explaining what remains to be done to uphold one of the defining characteristics of the American dream.

Author : Sumit Agarwal,Mr. Andrea F Presbitero,Andre Silva,Carlo Wix
Publisher : International Monetary Fund
Page : 73 pages
File Size : 42,8 Mb
Release : 2023-03-10
Category : Business & Economics
ISBN : 9798400232428

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Who Pays for Your Rewards? Redistribution of the Credit Card Market by Sumit Agarwal,Mr. Andrea F Presbitero,Andre Silva,Carlo Wix Pdf

We study credit card rewards as an ideal laboratory to quantify redistribution between consumers in retail financial markets. Comparing cards with and without rewards, we find that, regardless of income, sophisticated individuals profit from reward credit cards at the expense of naive consumers. To probe the underlying mechanisms, we exploit bank-initiated account limit increases at the card level and show that reward cards induce more spending, leaving naive consumers with higher unpaid balances. Naive consumers also follow a sub-optimal balance-matching heuristic when repaying their credit cards, incurring higher costs. Banks incentivize the use of reward cards by offering lower interest rates than on comparable cards without rewards. We estimate an aggregate annual redistribution of $15 billion from less to more educated, poorer to richer, and high to low minority areas, widening existing disparities.

Author : United States. Congress. House. Committee on Banking and Financial Services. Subcommittee on Financial Institutions and Consumer Credit
Publisher : Unknown
Page : 1116 pages
File Size : 55,5 Mb
Release : 1996
Category : Business & Economics
ISBN : PURD:32754066349345

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H.R. 1362, the Financial Institutions Regulatory Relief Act of 1995 by United States. Congress. House. Committee on Banking and Financial Services. Subcommittee on Financial Institutions and Consumer Credit Pdf

Author : Richard S. Grossman
Publisher : Oxford University Press
Page : 224 pages
File Size : 44,6 Mb
Release : 2013-09-23
Category : Business & Economics
ISBN : 9780199322206

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WRONG by Richard S. Grossman Pdf

In recent years, the world has been rocked by major economic crises, most notably the devastating collapse of Lehman Brothers, the largest bankruptcy in American history, which triggered the breathtakingly destructive sub-prime disaster. What sparks these vast economic calamities? Why do our economic policy makers fail to protect us from such upheavals? In Wrong, economist Richard Grossman addresses such questions, shining a light on the poor thinking behind nine of the worst economic policy mistakes of the past 200 years, missteps whose outcomes ranged from appalling to tragic. Grossman tells the story behind each misconceived economic move, explaining why the policy was adopted, how it was implemented, and its short- and long-term consequences. In each case, he shows that the main culprits were policy makers who were guided by ideology rather than economics. For instance, Wrong looks at how America's unfounded fear of a centralized monetary authority caused them to reject two central banks, condemning the nation to wave after wave of financial panics. He describes how Britain's blind commitment to free markets, rather than to assisting the starving in Ireland, led to one of the nineteenth century's worst humanitarian tragedies- the Irish famine. And he shows how Britain's reestablishment of the gold standard after World War I, fuelled largely by a desire to recapture its pre-war dominance, helped to turn what would otherwise have been a normal recession into the Great Depression. Grossman also explores the Smoot-Hawley Tariff of 1930, Japan's lost decade of the 1990s, the American subprime crisis, and the present European sovereign debt crisis. Economic policy should be based on cold, hard economic analysis, Grossman concludes, not on an unquestioning commitment to a particular ideology. Wrong shows what happens when this sensible advice is ignored.