12,000

We have over 12,000 students, from over 100 countries, within one of the safest campuses in the UK

93%

93% of Lancaster students go into work or further study within six months of graduating

Home > Research > Publications & Outputs > Participating mortgages and the efficiency of f...
View graph of relations

« Back

Participating mortgages and the efficiency of financial intermediation

Research output: Contribution to journalJournal article

Published

Journal publication date11/2011
JournalJournal of Banking and Finance
Journal number11
Volume35
Number of pages13
Pages3042-3054
Original languageEnglish

Abstract

This paper establishes a basic framework to study three different variants of Participating Mortgages (PMs). We obtain results for Shared Appreciation Mortgages (SAMs), Shared Income Mortgages (SIMs) and Shared Equity Mortgages (SEMs) in closed-form. We illustrate our findings with examples that show PMs are also attractive in an environment where prepayment can occur. Finally we conclude with the public policy implications of employing PMs as workout loans, especially post sub-prime crisis. We argue that by facilitating better risk sharing, PMs offer a means to enhance the efficiency and resiliency of the financial system.

Bibliographic note

The final, definitive version of this article has been published in the Journal, Journal of Banking and Finance 35 (11), 2011, © ELSEVIER.
NullPointerException