Reverse Mortgages and Linked Securities (eBook)

The Complete Guide to Risk, Pricing, and Regulation

Vishaal B. Bhuyan (Autor)

eBook Download: PDF | EPUB

2010 | 1. Auflage
208 Seiten
John Wiley & Sons (Verlag)
978-0-470-92149-4 (ISBN)

Infos

An institutional investor's guide to the burgeoning field of
reverse mortgage securitization

Reverse Mortgages and Linked Securities is a contributed
title comprising many of the leading minds in the Home Equity
Conversion Mortgages (HECM) industry, including reverse mortgage
lenders, institutional investors, underwriters, attorneys, and
regulators.

This book begins with a brief history of reverse mortgages, and
quickly moves on to discuss how the industry has evolved-detailing
the players in these markets as well as the process. It discusses
the securitization of reverse mortgages and other linked securities
and includes coverage of pricing techniques and risk mitigation.
This reliable resource also takes the time to cover the current
regulatory environment of the HECM market, which is constantly
changing due to the current state of the real estate market.

* Highlights specific strategies that will allow institutional
investors to benefit from the resurgence of reverse mortgages and
linked securities

* One of the only guides to reverse mortgages and linked
securities targeted towards institutional investors interested in
securitized products

If you want to make the most of reverse mortgages and linked
securities, take the time to read this book.

Autor

Vishaal B. Bhuyan has been involved in the "life markets" for over five years and has focused on analyzing and investing in life settlements, reverse mortgages, and other linked assets. He has advised a number of large investment funds on the longevity and mortality risk asset class and has been invited to speak at various investment and industry-specific conferences across the United States, Europe, and Asia. Bhuyan is also the editor and coauthor of Life Markets: Trading Mortality and Longevity Risk with Life Settlements and Linked Securities (Wiley) and will be releasing The Esoteric Investor (FT Press) in 2011.

Inhalt

Preface.

Acknowledgments.

List of Contributors.

Part One Reverse Mortgage Basics.

Chapter 1 Reverse Mortgage Primer.

Loan Disbursements.

Overview of Lender Challenges.

Summary.

Chapter 2 The History of Reverse Mortgages - anInsider's View.

Formative Years.

Private Programs.

First Lifetime Reverse Mortgages.

Fannie Mae Stakes a Claim to the Marketplace.

Roots of the Securitization of Reverse Mortgages.

Summary.

Chapter 3 HECM Explained Reverse Mortgages Originated throughthe Home Equity Conversion Mortgage (HECM) Program.

Legislative History and Program Fundamentals.

Disbursing Funds and Calculating Loans and Interest.

Changes to the Program Following the 2008 Act.

Consumer Focused Elements of the Program.

Summary.

Part Two Underwriting and Risk Analysis.

Chapter 4 Underwriting Reverse Mortgages.

Underwriting Life Expectancy.

Life Settlement versus Reverse Mortgage Underwriting.

Simplicity of the Current Reverse Mortgage UnderwritingProcess.

Why Does Underwriting Matter?

Proposed Elements of Reverse Mortgage Underwriting.

Summary.

Chapter 5 Risk Mitigation from Existing and ProposedFinancial Products.

Reverse Mortgage Risks.

Agency versus Non-Conforming Loans.

Summary.

Chapter 6 Longevity Risk and Fair Value Accounting.

Longevity Cost Calculator(TM) as a Loan Underwriting andPricing Tool.

Reverse Mortgage Loan Pricing Using the Longevity CostCalculator

Existing Accounting Framework.

Suggested GAAP Compliant Methodology to Standardize LifeSettlement Underwriting.

Summary.

Chapter 7 Risk Mitigation Available Hedges & Products inDevelopment for Risk Transfer.

Hedging Crossover Components in the Capital Markets.

Insurance Solutions.

Summary.

Chapter 8 Criteria for Rating U.K. Reverse Mortgage-BackedSecurities.

Overview of Reverse (Equity Release) Mortgages.

Reverse Mortgage-Backed Securitization.

Mortality Assumptions.

Prepayment Assumptions.

House Price Increase Assumptions.

HPI in Year 1.

HPI in Years 5-15.

HPI in Years 16 to Legal Final Maturity Date.

Costs and Sale Period.

Summary.

Part Three Tax Treatment.

Chapter 9 United States Federal Income Tax Aspects of ReverseMortgages.

What is a Reverse Mortgage?

Deductibility of Interest Payments on Reverse Mortgages.

Securitization of Reverse Mortgage Loans Through REMICStructures.

Practical Observations Regarding Investment Reverse MortgageREMIC Securities.

Summary.

Part Four Reverse Mortgages in Context.

Chapter 10 Unlocking Housing Equity in Japan.

Implementation in the Japanese Context.

Feasibility of Reverse Mortgages in Japan.

Summary.

Chapter 11 The Secondary Market in Home Equity ConversionMortgages.

The Reverse Mortgage to Liquidate Home Equity.

HECM: A Financial Innovation.

Cash Flows, Risk, and Uncertainty.

The Secondary Market for HECM.

HECM Securitization.

Longevity Risk Embedded in HECM.

The Constraints of the Underlying Asset.

Concluding Remarks.

Summary.

Appendix A Housing Wealth Among the Elderly.

Wealth in Housing.

Owner-Occupancy Rates.

How Risky is Housing Wealth?

Do the Elderly Decumulate their Housing Wealth?

Appendix B: Reverse Mortgage Analytics.

Determining the Payout Values: Practical Considerations.

Computing Payout Values: An Example.

Notes.

Glossary.

About the Author.

About the Contributors.

Index.

Produkt-Details

• Erscheint lt. Verlag: 1.11.2010
• Reihe/Serie: Wiley Finance Editions
• Reihe/Serie: Wiley Finance Editions
• Sprache: englisch
• Themenwelt: Recht / Steuern ► Wirtschaftsrecht
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
• Themenwelt: Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Bankbetriebslehre
• Schlagworte: Finance & Investments • Finanz- u. Anlagewesen • Institutional & Corporate Finance • Institutionelle Finanzplanung
• ISBN-10: 0-470-92149-8 / 0470921498
• ISBN-13: 978-0-470-92149-4 / 9780470921494