Equity Lines Research Articles

Asymmetric Information in Dynamic Contract Settings: Evidence from the Home Equity Credit Market

We analyze more than 108,000 home equity loans and lines of credits to study the role of information asymmetry in a credit market where borrowers face a menu of contract options and a lender uses a counteroffer to further mitigate contract frictions. Our results reveal that a less credit-worthy applicant is more likely to select a credit contract that requires less collateral. Further analysis on borrower repayment behavior ex post indicates that the lender may face adverse selection due to private information, controlling for observable risk attributes. We also find that systematic screening ex ante by a lender to mitigate contract frictions can effectively reduce overall credit losses ex post.

Retirement Imperiled: The Case Of HELOCs

There is no escape from the onslaught. Advertisements arrive in the post, in the e-mail inbox, through phone solicitations, internet pop-ups, and radio and television spots. One would think that mortgages (1st mortgages, Reverse Mortgages 2 , and Home Equity Lines of Credit, HELOC, 3 ) have never been as popular. The advertisements show consumers using equity from their homes to purchase second homes, do home improvements, take luxury vacations, and go on cruises, purchase new/used/antique cars, boats, motorcycles and other consumer items. The origin for this trend can be traced to the “Tax Reform of 1986.” Pre “reform”, mortgages were used to pay for houses only as interest on consumer loans was also a tax deductible item. Post 1986, the only tax deductible interest for consumers was that paid on a mortgage. Shortly thereafter, the use of 2 nd mortgages to pay for automobiles started and the scope of uses for home equity and instruments designed to tap it has expanded ever since. As is always the case, choices have consequences and the use of funds obtained through mortgages can have undesirable consequences, particularly on the resources available for retirement. Thus, this research will explore the changing view of debt on the part of US Consumers’ and the impact of this increased level of debt on consumers’ spending habits, home equity and retirement security.

Park National Corp. (Newark, OH)

AbstractCommercial Banking (MIC: 8.1 SIC: 6021 NAIC: 522110)Park National is a bank holding company. Through its subsidiary banks, Co. engages in the commercial banking and trust business, primarily conducted in small and medium population Ohio communities. Co.'s subsidiaries are engaged in the acceptance of deposits for demand, savings and time accounts; commercial, industrial, consumer and real estate lending, including installment loans, credit cards, home equity lines of credit and commercial and auto leasing; trust services; cash management; safe deposit operations; electronic funds transfers; Internet banking; and other banking‐related services. As of Dec 31 2006, Co. had total assets of $5.47 billion and total deposits of $3.83 billion.

MAF Bancorp, Inc.

AbstractOther Depository Banking (MIC: 8.5 SIC: 6035 NAIC: 522120)MAP Bancorp is a holding company. Through its Mid America Bank subsidiary, Co. provides community‐oriented financial services to retail and business banking customers, primarily generating deposits and originating loans. Co.'s deposit products include commercial checking, interest and noninterest bearing checking, commercial money markets and certificates of deposit. Co.'s lending activities include one‐ to four‐family, equity lines of credit and home equity loans, multi‐family, commercial real estate, construction and land loans, and commercial business loans. Also, Co. offers investment services and securities brokerage, general insurance services, as well as other financial services.

MAF Bancorp, Inc.

AbstractOther Depository Banking (MIC: 8.5 SIC: 6035 NAIC: 522120)MAP Bancorp is a holding company. Through its wholly‐owned subsidiary, Mid America Bank, Co. offers a variety of checking, savings and other deposit accounts as well as investment services, general insurance services and other financial services targeted to individuals, families and small‐ to medium‐sized businesses in its primary market areas of Illinois and Wisconsin. Co. also originates residential one‐ to four‐family mortgage loans, home equity loans, and equity lines of credit. In addition, Co. engages in residential real estate land development through itsMAF Developments, Inc subsidiary. As of Dec 31 2006, Co. had total assets of $11.12 billion.

MAF Bancorp, Inc.

AbstractOther Depository Banking (MIC: 8.5 SIC: 6035 NAIC: 522120)MAF Bancorp is a holding company. Through its wholly‐owned subsidiary, Mid America Bank, Co. offers a variety of checking, savings and other deposit accounts as well as investment services, general insurance services and other financial services targeted to individuals, families and small‐ to medium‐sized businesses in its primary market areas of Illinois and Wisconsin. Co. also originates residential one‐ to four‐family mortgage loans, home equity loans, and equity lines of credit. In addition, Co. engages in residential real estate land development through its MAP Developments, Inc subsidiary. As of Dec 31 2006, Co. had total assets of $11.12 billion.

MAF Bancorp, Inc.

AbstractOther Depository Banking (MIC: 8.5 SIC: 6035 NAIC: 522120)MAP Bancorp is a holding company. Through its wholly‐owned subsidiary, Mid America Bank, Co. offers a variety of checking, savings and other deposit accounts as well as investment services, general insurance services and other financial services targeted to individuals, families and small‐ to medium‐sized businesses in its primary market areas of Illinois and Wisconsin. Co. also originates residential one‐ to four‐family mortgage loans, home equity loans, and equity lines of credit. In addition, Co. targets multi‐family mortgage and residential construction loans and commercial real estate, land development and commercial loans. As of Dec 31 2005, Co. had total assets of $10.49 billion.

Modification of tissue fatty acid composition in Murray cod (Maccullochella peelii peelii, Mitchell) resulting from a shift from vegetable oil diets to a fish oil diet

The dynamics of fatty acid composition modifications were examined in tissues of Murray cod fed diets containing fish oil (FO), canola oil (CO) and linseed oil (LO) for a 25-week period and subsequently transferred to a FO (finishing/wash-out) diet for a further 16 weeks. At the commencement of the wash-out period, following 25 weeks of vegetable oil substitution diets, the fatty acid compositions of Murray cod fillets were reflective of the respective diets. After transfer to the FO diet, differences decreased in quantity and in numerousness, resulting in a revert to the FO fatty acid composition. Changes in percentages of the fatty acids and total accumulation in the fillet could be described by exponential equations and demonstrated that major modifications occurred in the first days of the finishing period. A dilution model was tested to predict fatty acid composition. In spite of a general reliability of the model ( Y =0.9234 X +0.4260, R 2 =0.957, P X is the predicted percentage of fatty acid; Y the observed percentage of fatty acid), in some instances the regression comparing observed and predicted values was markedly different from the line of equity, indicating that the rate of change was higher than predicted (i.e. Y =0.4205 X +1.191, R 2 =0.974, P X is the predicted percentage of α-linolenic acid; Y the observed percentage of α-linolenic acid). Ultimately, using the coefficient of distance ( D ), it was shown that the fatty acid composition of fish previously fed the vegetable oil diets returned to the average variability of the fillet fatty acid composition of Murray cod after 70 or 97 days (LO and CO respectively).

An empirical analysis of home equity loan and line performance

Given the growth in home equity lending during the 1990s, it is imperative that lenders and regulators understand the risks associated with this segment of the residential mortgage market. Using a unique panel data set of over 135,000 homeowners with second mortgages, our analysis indicates that significant differences exist in the prepayment and default probabilities of home equity loans and lines, providing insights into bank minimum capital requirements. We find that households with equity loans are relatively more sensitive to changes in interest rates. By contrast, households with equity lines are more sensitive to appreciation in property value.

Irwin Financial Corp. (Columbus, IN)

AbstractCommercial Banking (MIC: 8.1 SIC: 6022 NAIC: 522110)Irwin Financial is a diversified financial services engaged in mortgage banking, commercial banking, home equity lending, commercial finance, and venture capital. The mortgage banking business originates, purchases, sells, and services residential mortgage loans. The commercial banking business provides credit, cash management and personal banking products primarily to small businesses and business owners. Irwin Home Equity originates, purchases, securitizes and services home equity loans and lines of credit. Co.'s commercial finance business originates small‐ticket equipment leases. Irwin Ventures invests in early stage companies in the financial services industry.

First Oak Brook Bancshares, Inc.

AbstractCommercial Banking (MIC: 8.1 SIC: 6022 NAIC: 522110)First Oak Brook Bancshares is a holding company. Through its Oak Brook Bank (the Bank) subsidiary, Co. provides general retail and commercial banking, primarily in the Chicago Metropolitan area. The services offered include demand, savings and time deposits, corporate treasury management services, merchant credit card processing, commercial lending products such as commercial loans, construction loans, mortgages and letters of credit, and personal lending products such as residential mortgages, home equity lines and vehicle loans. The Bank operates an investment management and trust department as well as an investment sales division. At Dec 31 2004, Co. had total assets of $2.08 billion.

Park National Corp. (Newark, OH)

AbstractCommercial Banking (MIC: 8.1 SIC: 6021 NAIC: 522110)Park National, with $5.41 billion in total assets at Dec 31 2004, is a bank holding company. Through its subsidiaries, Co. engages in general commercial banking and trust business in small and medium population Ohio communities. Co.'s subsidiaries provide the following services: the acceptance and servicing of demand, savings and time deposit accounts; commercial, industrial, consumer and real estate lending, including installment loans, credit cards, home equity lines of credit and commercial and auto leasing; trust services; cash management; safe deposit operations; electronic funds transfers; and online Internet banking with bill pay service.

Washington Trust Bancorp, Inc.

AbstractCommercial Banking (MIC: 8.1 SIC: 6022 NAIC: 522110)Washington Trust Bancorp is a bank holding company, operating through its wholly owned subsidiary, The Washington Trust Company (the Bank). The Bank's market area includes Washington County and portions of Providence and Kent Counties in Rhode Island, as well as a part of New London County in Connecticut. The Bank provides a range of financial services, including: residential mortgages, commercial loans, commercial and consumer demand deposits, construction loans, consumer installment loans, home equity lines of credit, retirement accounts, merchant credit card services, cash management services, and trust and investment management services. At Dec 31 2004, Co. had assets of $2.31 billion.

Irwin Financial Corp. (Columbus, IN)

Mergent's Dividend AchieversVolume 3, Issue 2 p. 152-152 U.S. Company Reports Irwin Financial Corp. (Columbus, IN)† First published: 20 April 2006 https://doi.org/10.1002/div.3960 † Contact: : William I. Miller — Chmn., C.E.O. Address: : 500 Washington Street, Columbus, IN 47201 Web Site: : www.irwinfinancial.com AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract Commercial Banking (MIC: 8.1 SIC: 6022 NAIC: 522110) Irwin Financial is a diversified financial services engaged in mortgage banking, commercial banking, home equity lending, commercial finance, and venture capital. The mortgage banking business originates, purchases, sells, and services residential mortgage loans. The commercial banking business provides credit, cash management and personal banking products primarily to small businesses and business owners. Irwin Home Equity originates, purchases, securitizes and services home equity loans and lines of credit. Co.'s commercial finance business originates small-ticket equipment leases. Irwin Ventures invests in early stage companies in the financial services industry. Volume3, Issue2Spring 2006Pages 152-152 RelatedInformation

Irwin Financial Corp. (Columbus, IN)

Mergent's Dividend AchieversVolume 3, Issue 3 p. 151-151 U.S. Company Reports Irwin Financial Corp. (Columbus, IN)† First published: 30 June 2006 https://doi.org/10.1002/div.4377 † Contact: : William I. Miller — Chmn., C.E.O. Address: : 500 Washington Street, Columbus, IN 47201 Web Site: : www.irwinfinancial.com AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Abstract Commercial Banking (MIC: 8.1 SIC: 6022 NAIC: 522110) Irwin Financial is a diversified financial services engaged in mortgage banking, commercial banking, home equity lending, commercial finance, and venture capital. The mortgage banking business originates, purchases, sells, and services residential mortgage loans. The commercial banking business provides credit, cash management and personal banking products primarily to small businesses and business owners. Irwin Home Equity originates, purchases, securitizes and services home equity loans and lines of credit. Co.'s commercial finance business originates small-ticket equipment leases. Irwin Ventures invests in early stage companies in the financial services industry. Volume3, Issue3Summer 2006Pages 151-151 RelatedInformation

Housing Choices and Mortgage Financing Options for Seniors

Executive Summary.Why would an individual or couple who are age 55 or older have a mortgage on their primary residence or second home? Life-cycle financial patterns of behavior suggest that mortgages should be paid-off by this age. The purpose of this study is to examine the option of seniors to finance their primary residence and/or second home and the resulting difference(s), if any, in their asset allocations. Results indicate that the majority of seniors do have a mortgage. Based on probit and regression analyses, respondents are more likely to have a mortgage if they have a higher market value for their primary residence, a home equity line of credit, a second home, are not retired, and/or have a lower level of liquid assets.

MAP Bancorp, Inc.

Mergent's Dividend AchieversVolume 3, Issue 4 p. 171-171 U.S. Company Reports MAP Bancorp, Inc.† First published: 10 October 2006 https://doi.org/10.1002/div.4814 † Contact: : Allen H. Koranda — Chmn., C.E.O. Address: : 55th Street & Holmes Avenue, Clarendon Hills, IL 60514-1500 Web Site: : www.mafbancorp.com AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Abstract Other Depository Banking (MIC: 8.5 SIC: 6035 NAIC: 522120) MAP Bancorp is a holding company. Through its wholly-owned subsidiary, Mid America Bank, Co. offers a variety of checking, savings and other deposit accounts as well as investment services, general insurance services and other financial services targeted to individuals, families and small- to medium-sized businesses in its primary market areas of Illinois and Wisconsin. Co. also originates residential one- to four-family mortgage loans, home equity loans, and equity lines of credit. In addition, Co. targets multi-family mortgage and residential construction loans and commercial real estate, land development and commercial loans. As of Dec 31 2005, Co. had total assets of $10.49 billion. Volume3, Issue4Autumn (Fall) 2006Pages 171-171 RelatedInformation

Home Equity Line of Credit Securitization

With interest rates near their historic lows and with real estate prices continuing to climb, homeowners seem increasingly eager for home equity lines of credit (HELOC) to borrow a portion of the increasing equity in their homes. HELOC production is filling a larger portion of lenders9 balance sheets. As a result, lenders are increasingly looking to the securitization markets to provide financing for these loans and to reduce their exposure to these first and second trust deeds. In this article, the author looks at the HELOC market and discusses some issues securitizers have faced along with how they have addressed these issues. In particular, issuers that securitize convert loans primarily into cash along with the following typical retained interests: transferors9 interest (sellers9 interest), subordinated bonds/over-collateralization (OC), spread accounts (if any), interest only (IO) securities, and mortgage servicing rights (MSR). The author discusses account and servicing issues for each of those retained interests.

The Basel II Reform and Retail Credit Markets

Over the last two decades, many large banks have developed advanced quantitative credit risk models for allocating economic capital, measuring risk-adjusted returns at the businessline and individual credit level, and improving overall risk management. The advent of these new models and their incorporation into bank credit risk management were an important impetus for the effort to reform the Basel Committee’s standards for regulatory capitalV Basel IIVand, in turn, the Basel II proposal is encouraging banks to upgrade their credit risk management approaches. Under the Basel II proposal, banks with sufficiently sophisticated risk measurement and management systems can use their own internal systems to estimate key risk parameters that determine regulatory capital minimums. While general principles of portfolio credit risk modeling are applicable for commercial and retail portfolios, the Basel II framework was built based primarily on industry practices developed for large commercial credits. Over time, the Basel II proposal has explicitly incorporated the unique characteristics of retail credits into this overall framework. The Basel II proposal defines retail loans to include most loans to individuals, including credit card loans, mortgage loans, home equity lines of credit, auto loans, and other consumer loans. In addition, the Basel II proposal includes small loans to businesses as retail credits if those loans are managed on a pooled basis. Basel II’s initial emphasis on corporate credit is not entirely surprising, since many of the models built for estimating capital needs and extreme tails of credit loss distributions (e.g., CreditMetrics, Credit Risk, KMV Portfolio Manager) were explicitly developed for the large commercial bond or loan sector. Moreover, much of the academic research on credit risk also focused on the large corporate credit market where data were more easily available

Irwin Financial Corp. (COLUMBUS, IN)

AbstractCommercial Banking (MIC: 8.1 SIC: 6022 NAIC: 522110)Irwin Financial is a diversified financial services engaged in mortgage banking, commercial banking, home equity lending, commercial finance, and venture capital. The mortgage banking business originates, purchases, sells, and services residential mortgage loans. The commercial banking business provides credit, cash management and personal banking products primarily to small businesses and business owners. Irwin Home Equity originates, purchases, securitizes and services home equity loans and lines of credit. Co.'s commercial finance business originates small‐ticket equipment leases. Irwin Ventures invests in early stage companies in the financial services industry.