Abstract
This paper examines the role of loan characteristics in mortgage default probability for different mortgage lenders in the UK. The accuracy of default prediction is tested with two statistical methods, a probit model and linear discriminant analysis, using a unique dataset of defaulted commercial loan portfolios provided by sixty-six financial institutions. Both models establish that the attributes of the underlying real estate asset and the lender are significant factors in determining default probability for commercial mortgages. In addition to traditional risk factors such as loan-to-value and debt servicing coverage ratio lenders and regulators should consider loan characteristics to assess more accurately probabilities of default.
Highlights
In the meantime, sub-board committees are set up and appointed with a role for the same attempt to enhance board governance
Note: ROA is of income before tax scaled by total assets ACINDEP and ACEXP are audit committee independence and experienced members, LEVER is the ratio of total long-term debts over total assets, INDTYP it dummy variable; representing three industry types "manufacturing, investment, and service sectors. ;***,**,*are significance levels at 1,5 and 10%, respectively
Note : Table 4 report regression results using ordinary least squares (OLS), ACINDEis is calculated by the number of independent members ROA is of income before tax scaled by total assets, LEVERG is the ratio of total long-term debts over total assets, INDTYP it dummy variable; representing three industry types "manufacturing, investment, and service sectors. ;***,**,*are significance levels at 1,5 and 10%, respectively
Summary
Sub-board committees are set up and appointed with a role for the same attempt to enhance board governance. Company efficiency is increased by enhancing the Board's oversight and decreased information asymmetry through the participation of an efficient committee. This alleviates the dilemma of the Department as the audit committee requests that the details be duly disclosed (Gibbins et al, 2010). The following research question is directly addressed by this study: Different financial irregularities place greater liability on the board Those financial irregularities raised concerns about the audit committee's monitoring efficacy in conflict resolution (Ebrahim, 2007).
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