Search Results - subject:"loan insurance"

Loan insurance, adverse selection and screening

Ahnert, Toni; Kuncl, Martin - 2019

are risk-free and liquid in a secondary market, while uninsured loans are subject to adverse selection. Loan insurance … pecuniary externality implies insufficient loan insurance in the liquid equilibrium. To achieve constrained efficiency, a …; and (ii) imposes Pigouvian subsidies on loan insurance in the liquid equilibrium to correct for the externality. …

Persistent link: https://www.econbiz.de/10012287496

Debt collateralization, structured finance, and the CDS basis

Gong, Feixue; Phelan, Gregory - 2019 - This version: September 30, 2019

Persistent link: https://www.econbiz.de/10012116456

Insuring College Failure Risk

Chatterjee, Satyajit; Ionescu, Felicia Anamaria - 2019

Participants in student loan programs must repay loans in full regardless of whether they complete college. But many students who take out a loan do not earn a degree (the dropout rate among college students is between 33 to 50 percent). The authors examine whether insurance against...

Persistent link: https://www.econbiz.de/10014199318

Long-term Outcomes of FHA First-time Homebuyers

Lee, Donghoon - 2018

The Federal Housing Administration (FHA) has stated that its goal is to foster sustainable homeownership. In this paper, we propose some metrics for evaluating the degree to which the FHA is attaining this goal for first-time homebuyers. This work uses New York Fed Consumer Credit Panel data to...

Persistent link: https://www.econbiz.de/10012926399

Long-Term Outcomes of FHA First-Time Homebuyers

Lee, Donghoon - 2018

The Federal Housing Administration (FHA), which insures mortgages for low- to moderate-income homebuyers, has stated that its goal is to foster sustainable homeownership. This study proposes metrics for evaluating the degree to which the FHA has succeeded in this mission for an important program...

Persistent link: https://www.econbiz.de/10012906751

Credit Insurance, Bailout and Systemic Risk

Kishore, Kaushalendra - 2018

This paper studies the impact of expectation of bailout of a credit insurance firm on the investment strategies of the counterparty banks. If the failure of credit insurance firm may result in the bankruptcy of its counterparty banks, then the regulator will be forced to bail it out. This...

Persistent link: https://www.econbiz.de/10012907457

q-Gaussian Model of Default : Valuation of CDS Spreads

Katz, Yuri A. - 2018

The q-Gaussian generalization of the Merton framework allows pricing of the additional risk premium related to fluctuations of the variance of the market value of a company's assets, which can explain the observed level of short-term CDS spreads of investment grade issuers. The derived simple...

Persistent link: https://www.econbiz.de/10012908526

Quanto CDS Spreads

Lando, David - 2018

Quanto CDS spreads are differences in CDS premiums of the same reference entity but in different currency denominations. Such spreads can arise in arbitrage-free models and depend on the risk of a jump in the exchange rate upon default of the underlying and the covariance between the exchange...

Persistent link: https://www.econbiz.de/10012909325

Cost Rigidity and CDS Spreads

Bhojraj, Sanjeev - 2018

We provide evidence that credit investors do not fully impound the implications of firms' cost structure when pricing credit default swaps. Information about firms' cost structure is not disclosed and needs to be estimated. Furthermore, the performance implications of firms' cost structure...

Persistent link: https://www.econbiz.de/10012912219

Credit Insurance, Distress Resolution Costs, and Bond Spreads

Narayanan, Rajesh - 2018

Credit default swaps (CDS) introduce frictions in debt renegotiations because they alter the incentives of creditors insured with CDS to favor bankruptcy instead of restructuring debt out-of-court. Such renegotiation frictions can increase bond spreads by increasing distress resolution costs....

Persistent link: https://www.econbiz.de/10012937660