Mortgage Bank Research Articles

A Critical Assessment of the Nature of Service Delivery of the Federal Mortgage Bank of Nigeria, Kano Branch from 2020 to 2024

A Critical Assessment of the Nature of Service Delivery of the Federal Mortgage Bank of Nigeria, Kano Branch from 2020 to 2024

CAPITAL STRUCTURE AND THE PERFORMANCE OF DEVELOPMENT FINANCE INSTITUTIONS IN NIGERIA

The study investigated the effect of capital structure on the performance of selected Development Finance Institutions (DFIs) in Nigeria. The study specifically examined the effect of Total Debt to Total Assets (TDTA) on performance of selected of development finance institutions in Nigeria; and ascertained the effect of Total Debt to Total Equity (TDTE) on performance of selected development finance institutions in Nigeria. The study adopted an ex-post facto research design and data were collected from published annual financial records of the selected DFIs on both TDTA and TDTE, the independent variables and Return on Assets (ROA), the dependent variable, for a period of ten (10) years (2013-2022). The population of the study composed of seven (7) national DFIs namely: Central Bank of Nigeria (CBN), Bank of Agriculture (BOA), Bank of Industry (BOI), Development Bank of Nigeria (DBN), Federal Mortgage Bank of Nigeria (FMBN), Nigeria-Export-Import Bank (NEXIM) and the Infrastructure Bank Plc (IBN). The study sampled four (4) national DFIs using a purposive sampling technique, including CBN, BOI, FMBN and NEXIM. Computation of the relevant ratios were done for the independent variables (TDTA and TDTE); and the dependent variable (ROA). Data analysis was done using multiple regression and the econometric technique of Dynamic Ordinary Least Squares (DOLS) with the aid of E-Views Version 13. The study found that TDTA has a negative but significant effect on ROA, indicating that a percentage change in TDTA leads to lower ROA by 0.071551 and TDTE has a positive effect of TDTE on ROA, showing that a percentage change in TDTE will significantly increase ROA by 0.001696. The study concluded that the investigated DFIs have low equity capital which seems to hinder their ability to attract large loans for operations. The study recommended amongst others that DFIs should maintain a balanced total debt to total assets (TDTA) and ensure the regular monitoring of the debt-to-asset ratio to ensure it remains within a healthy range which will help maintain a balance between leveraging and risk.

Estimating Risk of Debt Instruments Using the CreditMetrics<SUP>TM</SUP> Method: On the Example of JSCMB ‘Ipoteka-Bank’, Uzbekistan

In the article, credit risk assessment metric of a debt financial instrument, in particular a corporate Eurobond, is studied within the framework of the relevance of risk assessment in the financial sector due to the dangers and complexities of time. Joint-Stock Commercial Mortgage Bank ‘Ipoteka-Bank’, operating in the banking sector of the Republic of Uzbekistan, which is considered one of the important links of the financial sector of the Republic, was selected as the object of analysis. As input data for the analysis, statistical data of the bank provided in its official web-site’s open sources, in particular, data on Eurobonds issued and placed by the bank in London Stock Exchange, are used. At the same time, one of the advantages of the research is the described and disclosed in details and widely used global benchmarking data, published by Standard&Poor's rating agency, as part of the methodology requirement. According to the methodology, credit risk assessment analysis was performed following a strict and detailed calculation algorithm for debt instrument risk assessment. The calculation of credit risk assessment of one debt instrument, especially the Eurobond, according to this procedure followed with the authors’ discussion, conclusion and recommendation is also reflected in the article.

MORTGAGE LENDING AS A FACTOR OF SOCIAL AND ECONOMIC DEVELOPMENT OF THE COUNTRY

A mortgage and a mortgage loan are components of the mortgagesystem, the evolution of which dates back several millennia. During this period, there was a transformation of views on the mortgage -from a pledge -a plot of land to an understanding of the mortgage as a financial instrument in the mechanism of socio-economic development of the country.In the lands of Ukraine, the mortgage system arises and develops simultaneously with the development of banking. At the end of the 19th and the beginning of the 20th centuries. a network of mortgage banks was formed on the territory of Ukraine, and mortgages acquired credit functions and turned into a supply channel for investments in agriculture. In the modern period, a mortgage loan is an effective tool in the mechanism of development of the market economy. Mortgages not only stimulate the construction of new housing and provide housing for the country's population on a market basis, but also launch the mechanism for the development of the securities market, the banking and insurance market, and allow the creation of additional jobs in the construction industry and in the production of consumer durables. The action of the mortgage has a multiplicative effect and allows to achieve a significant socio-economic effect, is a factor in the birth of the middle class in societyand a prerequisite for the formation of social well-being. A key role in the development of mortgage lending in the modern period is played by the state program "eOselia", which began working in Ukraine in October 2022 and allowed to obtain a mortgage loan from 3% to 7% per annum. Since the beginning of the "eOselia" program in Ukraine, mortgage loans in the amount of more than 13 billion hryvnias have been issued, and more than 8,500 families have benefited from this program.Adapting the work of the mortgage system to the conditions of war, the aggravation of security risks and demographic changes, requires the participants of the mortgage market to improve the business models developed in pre-war times, to look for new forms for the restoration of mortgage lending, to conduct constant monitoring of social, political and economic factors. The adaptation mechanism on the part of the state provides for the strengthening of legal control over all elements of mortgage lending and maximum support through the transparency of pricing for mortgage loans.

The reverse mortgage market in New Zealand: key drivers of loan determination

ABSTRACT This paper examines the drivers of loan principals in the reverse mortgage and equity release market in New Zealand using a hedonic price model (HPM) approach. Our analysis using reverse mortgages data between 2004–2021, sourced from one major reverse mortgage bank, provides four key findings. First, the term of payment for repaid reverse mortgages is positively associated with loan principals, implying that longer repayment terms allow applicants who were able to repay mortgages to borrow more. Second, there is partial evidence to suggest the presence of a positive linear impact of the value of the current property on its loan principal, in line with previous house price modelling studies. Third, older applicants (age 75+) borrow less than younger applicants, which may be due to their repaying ability. Fourth, we confirm a positive effect of interest rates on reverse mortgage amounts but reject the positive association between wider loan-to-value policy restrictions and equity release lending amounts. The results broadly highlight that the house price is more relevant than any individual characteristic of a property in determining loan principals, and that all drivers are relevant in the early stage of the development of the reverse mortgages market in New Zealand.

Preferential mortgage: discrimination or differentiation

Mortgage lending is one of the most popular, but expensive types of lending. State participation through incentives increases the attractiveness of mortgages, but at the same time leads to sectoral, territorial, and subjective injustice. The study objectives are to determine the reasons for the differentiation of preferential mortgage conditions for different participants, to analyze the consequences of such differentiation, as well as to justify the need and develop regulatory measures in this area. The research used domestic and foreign scientists’ scientific works in the field of preferential mortgage lending, regulatory legal acts and program and strategic documents for the development of the mortgage bank lending market, as well as data generated by the authors on the basis of official statistical materials. Methods of statistical analysis, system-logical analysis, as well as general scientific methods such as induction, deduction and synthesis are used for analytical data processing. The audit of preferential mortgage lending programs revealed discriminatory factors by industry, territorial principles, as well as in relation to borrowers and lenders. Preferential programs should be targeted, conditions should be transparent, and methodological approaches should be the same for all participants involved in the implementation of programs. Differentiation of preferential mortgage lending programs should be regulated by the state, otherwise it may lead to discrimination.

Enterprise Risk Management, Risk-Taking, and Macroeconomic Implications: Evidence from Bank Mortgage Loan Management

Enterprise Risk Management, Risk-Taking, and Macroeconomic Implications: Evidence from Bank Mortgage Loan Management

Comparison of Mediation Effects on Interaction and Multigroup Approach in Structural Equation Modeling PLS in Case of Bank Mortgage

“Structural Equation Modeling is one of multivariate statistical method that used to explain multiple relationships between latent variables simultaneously to test a mediation model to conduct a formal test on mediation effects. Application PLS-SEM for exploratory research and theory development are increasing. Under certain conditions, the effect of exogenous variables on endogenous variable is also strengthened or weakened by moderating variable. In SEM, there are two approaches in analyzing moderation variables, namely the interaction method and the multigroup method. This article aims to compare the mediation effect on interaction approaches and multigroup approaches in Structural Equation Modeling. The data used is the case of timeliness of Bank X mortgage payments. In this article, statistical methods are evaluated to compare indirect effect between groups and examine indirect effect on each group. It was concluded that Collectability Status moderates the indirect relationship between Capital and the Timeliness of Payment through Willingness to Pay. Debtors with current collectability status more strongly effect the Timeliness of Payment than debtors with incurrect collectability status. Theresults of testing indirect effects on moderation with interaction and multigroup approaches are not much different. In the multigroup approach, the bootstrap interval bias is smaller than the bootstrap interval bias in the interaction approach. The Q-square Predictive Relevance value in both methods is quite high, indicating that the model is good. On the Current Collectibility Status group Q^2 is 89.3%, in the incurrect Collectibility Status Q^2 is 84.2%. While in the interaction approach, Q^2 is 70.4%. Researcher recommend a multigroup approach to data that has categorical moderation variables because differences between groups can be directly observed without adding interaction variables in the model.”

The Impact of Product Quality, Personal Trust, and Bank Trust for the Millennial Generation's Decision to Get a Bank Mortgage

This study aimed to investigate the relationship between personal trust, bank trust, product quality, and purchase intention among Indonesian consumers. The study collected responses from 133 participants in Jakarta, using a questionnaire with items adapted from previous research. The data was analyzed using SmartPLS to test reliability, validity, and hypotheses. The results showed that all constructs exhibited high levels of internal consistency and convergent validity. Furthermore, the correlation coefficients between the constructs were examined to assess discriminant validity. The results showed that the correlations were lower than the square root of the AVE, indicating discriminant validity among the variables. The study also investigated the specific indirect effects of personal trust and product quality on purchase intention through bank trust. The results showed that bank trust played a significant mediating role in the relationship between personal trust or product quality and purchase intention. Keywords: Personal trust, Bank trust, Product quality, Purchase intention

STRUCTURAL EQUATION MODELING MULTIGROUP INDIRECT EFFECTS ON BANK MORTGAGE PAYMENT TIMELINESS

Structural Equation Modeling (SEM) is a multivariate statistical method that is used to thoroughly explain the relationship between latent variables simultaneously. Until now, SEM continues to grow in research. This research was conducted to examine the indirect effect on the timeliness of paying bank mortgages with a multi-group moderation approach. Analysis to identify factors that influence the timeliness of paying bank mortgages is an important step for banks before extending credit to prospective customers. The data used in this research is secondary data from research grants from National Competitive Basic Research. The data scale used is the Likert scale for exogenous, mediating endogenous, and pure endogenous variables. While the moderating variable uses a dummy variable. The results of the study show that the indirect effect of Capacity and Capital on Pay on Time for Bank Mortgage customers has a significant effect, both on non-current collectibility status and current collectibility status. This is evidenced by the Sobel test value greater than (1.96) on the indirect effect test, and the p-value of the Wald test is smaller than (0.05) on the moderation indirect effect test. Mediator variable is able to increase the effect of exogenous variables on endogenous variable Customers with current collectibility status have a stronger influence on timely payments than customers with non-current collectibility status.

Influence of Risk Management on Project Performance: A Case of Investment and Mortgage Bank (I&M Bank) Building Project in Nyarugenge District (2018-2022)

Influence of Risk Management on Project Performance: A Case of Investment and Mortgage Bank (I&M Bank) Building Project in Nyarugenge District (2018-2022)

Déjà Vu: CEO overconfidence and bank mortgage lending in the post-financial crisis period

This study examines the impact of CEO overconfidence on banks’ mortgage lending decisions in the post-financial crisis period. We find that banks with overconfident CEOs are more likely to approve mortgage loan applications of risky borrowers. Overconfident CEOs contribute to the riskiness of mortgage lending by encouraging banks to take on more risk. The positive effect of CEO overconfidence is more pronounced in banks with powerful CEOs, weak governance, low levels of technology adoption, and limited competition. Although improved bank regulations and intensified monitoring following the crisis have reduced the magnitude of this positive impact, it still exists, albeit to a lesser extent. Our findings remain consistent after endogeneity corrections and a battery of robustness tests. Overall, this study provides additional evidence of CEO overconfidence in shaping bank lending policies.

The Differences between Murabahah and Musharakah Muatanaqisah Contract Payments Using the Time Value of Money Method (Study Case: PT Sarana Perumahan Mandiri)

Indonesia’s population is expected to grow by 68% by 2050, with the government aiming to improve living conditions and promote economic expansion. The Million Homes Program will determine the nation’s future. Islamic banks offer mortgage financing options, including Musharakah, Murabahah, and Ijarah contracts. These contracts require a thorough risk assessment and understanding of each party’s responsibilities. The study aims to determine the ideal contract for Islamic bank mortgages, allowing developers to advise clients on their use before purchasing subsidized homes. The authors used contracts called Murabahah and Musharakah to calculate financing, but found that the equivalent rates on each contract varied, raising concerns about the amount of finance developers and buyers need to provide. The Time Value of Money technique was employed to calculate the cost difference between the Murabaha and Musharakah contracts. The results suggest that customers may choose Bank Syariah B or Bank Syariah A based on lower equivalent rates and stability. With a margin of 67.79% in the Musharakah contract, Bank Syariah B can be chosen with an equivalent rate of 7.5% for the first 13 years, 10.1% on the 14th year, and then falling back to 10.1% on the 15th year.

Economic Consequences of Transparency Regulation: Evidence from Bank Mortgage Lending

ABSTRACTWe examine the economic consequences of a rule designed to improve consumers' understanding of mortgage information. The 2015 TILA‐RESPA Integrated Disclosures rule (TRID) simplifies the mortgage disclosures provided to consumers. As a consequence, TRID‐affected mortgages become a less attractive investment opportunity to banks. Our main results document that mortgage applications affected by TRID are less likely to be approved following the rule's effective date. We find evidence consistent with both a decrease in consumers' information processing costs and an increase in banks' secondary market frictions, providing insight into the potential channels through which this reduction in mortgage credit operates. We also find that banks partially compensate for reduced mortgage lending by increasing small business lending, and that fintechs absorb mortgage demand in areas with reduced mortgage lending by banks. Our study documents real actions that firms take in response to disclosure transparency regulation and contributes to the literature on the economic consequences of such regulation.

Fatwa DSN-MUI No. 04/DSN-MUI/IV/2000 tentang Murabahah: Refleksi Kritis terhadap Implementasi BSI Dimensi Ekonomi Islam

This research aims to examine the Implementation of DSN-MUI Fatwa No. 04/DSN-MUI/IV/2000 concerning Murabaha in terms of Islamic economic aspects. This type of research is descriptive qualitative to explain narratively the results of research that are more concrete and in-depth. The approach used is normative, namely studying the DSN MUI fatwa regarding murabahah contracts in mortgage products implemented by Bank BNI Syariah Parepare Branch, which today has transformed into Bank Syariah Indonesia. The research results were obtained by observing and using direct interviews with informants. The results of the study found that the housing implementation of Indonesian Islamic Bank (BSI) mortgage products was in line with the DSN-MUI Fatwa No. 04/DSN-MUI/IV/2000 concerning Murabaha which is based on the context of the customer's needs to realize falah welfare together based on the principles of Islamic economics.

Determinants of Financial Depth: A Case Study of Mortgage and Microfinance Banks in Nigeria

Financial depth is an important components of financial development for which determinants have been examined by a number of extant studies, using different kinds of financial depth indicators. This study aims at analyzing the factors that determine financial depth using the assets of mortgage and microfinance banks as indicators of financial depth. The study employs data that span from 1992 to 2021, using Autoregressive Distributed Lag (ARDL) model. It is found in the study that the policy of conversion of community banks to microfinance banks and the introduction of mortgage warehouse fund have positive effects on microfinance and mortgage banks’ assets. Also, it is found that literacy rate has negative effect only on the microfinance bank assets. Thus, this study recommends further deepening of the various segments of financial system, policy makers should strengthen the existing policies and create the new similar policies and reforms with respect to each indicator of financial depth.

Determinants of Housing Development in Nigeria

The purpose of the study was to examine factors of mortgage that affect housing development in Nigeria. The specific objectives were to; examine the effect of interest rate, mortgage bank deposit, mortgage investment on housing development. Data for this study were sourced from secondary data and were extracted from the Central Bank of Nigeria (CBN) Statistical Bulletin and the National Bureau of Statistics, Nigeria. Data obtained were tabulated, analyzed and tested using the ordinary least square multiple regression statistical techniques. Based on the result, the findings revealed thus; there was a significant effect of mortgage loans on housing development; there was a significant effect of interest loans on housing development; there was a significant effect of mortgage investment on housing development, and there was a significant effect of mortgage bank deposit on housing development. The study recommended mortgage institutions should develop strategies to mobilize more deposits and ensure effective allocation of housing funds particularly for the low income earners. And finally government should create enabling environments to encourage private housing sector participation in long-term housing finance by providing infrastructure, enhancing soundness and competitiveness of mortgage institutions and assuring property rights.

РЫНОК ИПОТЕЧНОГО КРЕДИТОВАНИЯ: ИТОГИ 2022 ГОДА И ПРОГНОЗ НА 2023 ГОД

The subject of the study is the mortgage lending market. The purpose of the study is to consider the problems and prospects for the development of the mortgage lending market. The objectives of the study are to reflect the key trends in the development of the bank mortgage lending market in the face of geopolitical uncertainty, to consider expert opinions regarding the forecast of its development. The novelty of the study: the problems and prospects for the development of the mortgage lending market are identified, the forms of its state support are considered. Conclusions: affordable loans are an important factor in the stable development of the real estate market. A popular area of mortgage lending is preferential mortgages with state support. The development of tranche mortgages, rental housing (leasing), digital mortgages is expected.

Housing and choice in Iquique and Alto Hospicio, Chile: Possibilities and limitations regarding the 2030 agenda and SDG 11

Access to housing, more than an enforceable right, has become a multidimensional problem in Chile. Faced with the impossibility of obtaining housing through subsidies, informal settlements—camps and land grabs—have expanded through the country's different cities since 2019. Given the evident collision with the Sustainable Development Goals (in particular Goal 11) commitments to sustainable cities, the Chilean State has increased its housing budget since 2020 to reactivate investment during the COVID-19 pandemic and expand the housing access alternatives for lower-class families with few possibilities chances of obtaining a bank mortgage. But is it possible to choose housing in contexts like the one described? In addition to environmental difficulties, cities in northern Chile, wedged between the sea and the desert, need to produce a socially sustainable environment in accordance with the requirements of complex, dynamic systems under permanent pressure to generate wellbeing. This manuscript seeks to explore and analyze these tensions in the cities of Iquique and Alto Hospicio, in Chile's Tarapacá Region. They form a dynamic conurbation, where daily mobility and the dispute over access to housing clash with the choice offered by the different subsidy programs and the expansion of camps on the edges of the desert. So, how far or how close is SDG 11 in places like these? Is there a viable alternative for urban sustainability in precarious spaces?

Real Estate Investment Capitalization Issues in Emerging Markets: Reflection on Capital Market Instruments

In spite of the potentials of the capital market, one wonders why the Nigerian real estate developer has not resorted to the use of capital market instruments for real estate financing. In light of the potentials of these instruments in real estate development financing, the study examines the issues bordering on real estate development financing using capital market instruments. Specifically, the study was guided by the following objectives: to ascertain the challenges associated with the funding of real estate development using capital market instruments in the study area, and to determine the prospects of capital market instruments in funding real estate development in the study area. The study area was the south-eastern geopolitical zone of Nigeria. A quantitative approach was chosen for this study. The population of the study was 245 comprising real estate investors\developers, Estate Surveying and Valuation firms, Primary and Federal Mortgage Bank of Nigeria, Nigeria Stock and Exchange Commission, selected Academia of Estate profession in south East, Nigeria. The primary data collected through the questionnaire were analyzed and presented using charts, Binomial test of proportion and Z-approximation test. The study found seven (7) significant challenges associated with the capital market financing of real estate development in the study area; while six (6) significant prospects of capital market funding of real estate development in the study area were found. The study recommended that policies that will impact positively on the real estate development sector of the Nigerian economy as it concerns funding should be pursued with all the seriousness it deserves; and good regulatory environment should be provide with adequate safeguard to enable investors tap into the potentials of the capital market in financing real estate development.