Home Equity Insurance

Home equity insurance policies, policies insuring homeowners against declines in the price of their homes, would bear some resemblance both to ordinary insurance and to financial hedging vehicles. A menu of choices for the design of such policies is presented here, and conceptual issues are discussed. Choices include pass-through futures and options, in which the insurance company in effect serves as a retailer to homeowners of short positions in real estate futures markets or of put options on real estate. Another choice is a life-event-triggered insurance policy, in which the homeowner pays regular fixed insurance premia and is entitled to a claim if both there is a sufficient decline in the real estate price index and a specified life event (such as a move beyond a certain geographical distance) occurs. Pricing of the premia to cover loss experience is derived, and tables of break-even policy premia are shown, based on estimated models of Los Angeles housing prices 1971- 91.

Moral Hazard in Home Equity Conversion

Home equity conversion as presently constituted or proposed usually does not deal well with the potential problem of moral hazard. Once homeowners know that the risk of poor market performance of their homes is borne by investors, they have an incentive to neglect to take steps to maintain the homes' values. They may thus create serious future losses for the investors. A calibrated model for assessing this moral hazard risk is presented that is suitable for a number of home equity conversion forms: 1) reverse mortgages, 2) home equity insurance, 3) shared appreciation mortgages, 4) housing partnerships, 5) shared equity mortgages and 6) sale of remainder interest. Modifications of these forms involving real estate price indices are proposed that might deal better with the problem of moral hazard.Reverse mortgages, home equity insurance, shared appreciation mortgages, housing partnerships, shared equity mortgages, sale of remainder interest, moral hazard, real estate price indices, home maintenance, home improvements

Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate

Evidence is shown, using US foreclosure data by state 1975-93, that periods of high default rates on home mortgages strongly tend to follow real estate price declines or interruptions in real estate price increase. The relation between price decline and foreclosure rates is modelled using a distributed lag. Using this model, holders of residential mortgage portfolios could hedge some of the risk of default by taking positions in futures or options markets for residential real estate prices, were such markets to be established.

Moral Hazard in Home Equity Conversion

Home equity conversion as presently constituted or proposed usually does not deal well with the potential problem of moral hazard. Once homeowners know that the risk of poor market performance of their homes is borne by investors, they have an incentive to neglect to take steps to maintain the homes’ values. They may thus create serious future losses for the investors. A calibrated model for assessing this moral hazard risk is presented that is suitable for a number of home equity conversion forms: 1) reverse mortgages, 2) home equity insurance, 3) shared appreciation mortgages, 4) housing partnerships, 5) shared equity mortgages and 6) sale of remainder interest. Modifications of these forms involving real estate price indices are proposed that might deal better with the problem of moral hazard

Index-Based Futures and Options Markets in Real Estate

Most institutional and individual portfolios are very undiversified in real estate: many hold no real estate at all, many have holdings highly concentrated in certain regions or types of real estate. The risk of these concentrated holdings is not hedged. We propose here that cash-settled futures and options markets be opened on real estate to better allow diversification and hedging, and show that these markets solve problems that have hampered other real estate hedging media in the past. Related institutions, such as home equity insurance, might develop around the futures and options markets. The establishment of these markets is likely to increase the quantity of reproducible real estate, and lower rents on real estate. It may also reduce the amplitude of speculative real estate price movements and dampen the business cycle

Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate

Evidence is shown, using US foreclosure data by state 1975-93, that periods of high default rates on home mortgages strongly tend to follow real estate price declines or interruptions in real estate price increase. The relation between price decline and foreclosure rates is modelled using a distributed lag. Using this model, holders of residential mortgage portfolios could hedge some of the risk of default by taking positions in futures or options markets for residential real estate prices, were such markets to be established

Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate

Evidence is shown, using US foreclosure data by state 1975-93, that periods of high default rates on home mortgages strongly tend to follow real estate price declines or interruptions in real estate price increase. The relation between price decline and foreclosure rates is modelled using a distributed lag. Using this model, holders of residential mortgage portfolios could hedge some of the risk of default by taking positions in futures or options markets for residential real estate prices, were such markets to be established.

Index-Based Futures and Options Markets in Real Estate

Most institutional and individual portfolios are very undiversified in real estate: many hold no real estate at all, many have holdings highly concentrated in certain regions or types of real estate. The risk of these concentrated holdings is not hedged. We propose here that cash-settled futures and options markets be opened on real estate to better allow diversification and hedging, and show that these markets solve problems that have hampered other real estate hedging media in the past. Related institutions, such as home equity insurance, might develop around the futures and options markets. The establishment of these markets is likely to increase the quantity of reproducible real estate, and lower rents on real estate. It may also reduce the amplitude of speculative real estate price movements and dampen the business cycle.Real estate, prices, portfolio choice

Moral Hazard in Home Equity Conversion

Home equity conversion as presently constituted or proposed usually does not deal well with the potential problem of moral hazard. Once home-owners know that the risk of poor market performance of their homes is borne by investors, they have an incentive to neglect to take steps to maintain the homes' values. They may thus create serious future losses for the investors. A calibrated model for assessing this moral hazard risk is presented that is suitable for a number of home equity conversion forms: 1) reverse mortgages, 2) home equity insurance, 3) shared appreciation mortgages, 4) housing partnerships, 5) shared equity mortgages and 6) sale of remainder interest. Modifications of these forms involving real estate price indices are proposed that might deal better with the problem of moral hazard.

Integrated safety analysis of umbralisib, a dual PI3Kd/CK1« inhibitor, in relapsed/refractory lymphoid malignancies

Phosphoinositide 3-kinase-d (PI3Kd) inhibitors are active in lymphoid malignancies, although associated toxicities can limit their use. Umbralisib is a dual inhibitor of PI3Kd and casein kinase-1« (CK1«). This study analyzed integrated comprehensive toxicity data from 4 open-label, phase 1 and 2 studies that included 371 adult patients (median age, 67 years) with relapsed/refractory non-Hodgkin lymphoma (follicular lymphoma [n 5 147]; marginal zone lymphoma [n 5 82]; diffuse large B-cell lymphoma/mantle cell lymphoma [n 5 74]; chronic lymphocytic leukemia [n 5 43]; and other tumor types [n 5 25]) who were treated with the recommended phase 2 dose of umbralisib 800 mg or higher once daily. At data cutoff, median duration of umbralisib treatment was 5.9 months (range, 0.1-75.1 months), and 107 patients (28.8%) received umbralisib for $12 months. Any-grade treatment-emergent adverse events (AEs) occurred in 366 (98.7%) of 371 patients, with the most frequent being diarrhea (52.3%), nausea (41.5%), and fatigue (31.8%). Grade 3 or higher treatment-emergent AEs occurred in 189 (50.9%) of 371 patients and included neutropenia (11.3%), diarrhea (7.3%), and increased aminotransferase levels (5.7%). Treatment-emergent serious AEs occurred in 95 (25.6%) of 371 patients. AEs of special interest were limited and included pneumonia (29 of 371 [7.8%]), noninfectious colitis (9 of 371 [2.4%]), and pneumonitis (4 of 371 [1.1%]). AEs led to discontinuation of umbralisib in 51 patients (13.7%). Four patients (1.1%) died of AEs, none of which was deemed related to umbralisib. No cumulative toxicities were reported. The favorable long-term tolerability profile and low rates of immune-mediated toxicities support the potential use of umbralisib for the benefit of a broad population of patients with lymphoid malignancies