Real Estate
The importance of underwriting standards to a healthy real estate finance market
Underwriting standards will have an impact on the real estate market by controlling speculation and risk taking. This took place when interest rates were low and the economy was strong. When this occurs, lenders increased the total amount of loans available. In most cases, the desire to add to their profit margins will result in practices that will ignore critical factors (such as: employment history, income and credit rating). Once this happens, is when financial institutions will make loans that are considered to be irresponsible. (Wickell, 2012) (Kolb, 2010)
After the economy begins to slow and interest rates are rising, is the point that these practices will hurt the lender. This is because the borrower more than likely could not afford the mortgage payment. This will result in the firm facing a wave of defaults. In the future, this will impact the ability of the bank to remain solvent. (Wickell, 2012) (Kolb, 2010)
These factors are showing how underwriting standards will help to support healthy real estate financing. The way that this will occur, is to establish certain practices that must be followed by lenders at all times. During situations when the economy is strong,...
profit through investing on Stock Market Generally, all over the world financial markets exemplify a state of intricate and inscrutable situation. These marketplaces are of immense significance in the western nations, where the constituents employ their expertise to invest and generate profit whilst formulating a pool of funds, statistics, derivatives, shares and calculation intricacy. These constituents or elements are those investment maestros who are the whole and sole performers of
And we must take into consideration what would happen if, somewhere down the line, we encountered the very real possibility of changed financial circumstances. The financial knots we're tying ourselves into now, as we scramble to purchase homes and wind up owning less of them, can have serious long-term ramifications. Because today's overall tighter finances often necessitate putting off major purchases, many adults don't buy their first home until they're
Kenyan reform policy Successful? The need for reform in Kenya has been clearly demonstrated. But the question remains, has this reform been successful? The slogan of "Harambe" fueled the passions of the Kenyan people and drove them to strive as one nation to lift themselves up from poverty and oppression. It has been ten years since the last reform and it is now time to look back and see what
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Liquidity and Loan Quality: the Impact it is having on Bank Health Since the 1980's, there has been an emphasis on deregulation within the banking industry. Part of the reason for this, is because of shifts in the economy (thanks in part to globalization) as the markets and products have changed. This has forced many different governments around the world to reduce regulations to include: liquidity and loan quality standards.
2. Second, the deductibility of mortgage interest and property tax payments serves to lower the after-tax cost of homeownership, also contributing to owners' ability to increase savings or consumption. Many low-income owners may not benefit from these provisions, however, because the standard deduction often exceeds interest and property tax 3. Third, homeownership allows a borrower to tap into secured lending against his or her home, which, all else equal, is often
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