The Pricing of Mortgages by Brokers: An Agency Problem?

Mortgage brokers have grown in importance in the home mortgage origination process in recent years suggesting they provide a valuable service matching borrowers and lenders, although their involvement has also been linked to the recent surge in mortgage defaults and foreclosures. As in other markets dominated by brokers, agents' incentives are often poorly aligned with those with whom they do business, in this case both the lenders who bear the risks once the loan is originated and the consumer who assumes liability for the debt and contract terms. In this paper, we describe the institutional arrangements under which mortgage brokers operate and empirically test whether loans originated by mortgage brokers are lower in cost than those that would be available directly from retail lenders. Results suggest loans originated by brokers cost borrowers about 20 basis points more, on average, than retail loans and that this premium is higher for lower-income and lower credit score borrowers.

Application of Reverse Regression to Boston Federal Reserve Data Refutes Claims of Discrimination

The topic of mortgage discrimination has received renewed interest since publication of the Boston Federal Reserve Bank study based on 1990 Home Mortgage Disclosure Act data. That study used traditional direct logistic regression to assess the influence of race on the probability of mortgage loan denial and reported the parameter estimate of race to be positive and significantly different from zero across several model specifications, thereby supporting contentions of discriminatory behavior. This paper develops an alternate approach, reverse regression, a method often used in the measurement of gender discrimination in labor markets. After discussion of theoretical issues regarding model choice, results of a reverse regression on the Boston Federal Reserve Bank study dataset are reported. Contrary to results using direct methods, reverse regression does not support contentions of mortgage discrimination in the Boston mortgage market. Rather the lower overall qualifications of minority applicants are likely to account for disparities in application outcomes.

Improving Parametric Mortgage Prepayment Models with Non-parametric Kernel Regression

Developing a good prepayment model is a central task in the valuation of mortgages and mortgage-backed securities but conventional parametric models often have bad out-of-sample predictive ability. A likely explanation is the highly non-linear nature of the prepayment function. Non-parametric techniques are much better at detecting non-linearity and multivariate interaction. This article discusses how non-parametric kernel regression may be applied to loan level event histories to produce a better parametric model. By utilizing a parsimonious specification, a model can be produced that practitioners can use in valuation routines based on Monte Carlo interest rate simulation.

Third Party Originators and Mortgage Prepayment Risk: An Agency Problem?

We focus on an agency problem encountered by mortgage lenders and investors in mortgage-backed securities when the underlying collateral is originated by third parties. Third parties, such as mortgage brokers, have economic incentives to encourage borrowers to refinance and, accordingly, their actions may affect asset values. We sketch the principal-agent problem and examine two sets of data. Results support the argument: loans originated by third parties are significantly more likely to prepay after controlling for other known determinants of termination risk. Moreover, third party loans are about three times as sensitive to refinancing incentives, compared to retail loans.

Shocks, Sensitivity and Resilience: Tracking the Economic Impacts of Environmental Disaster on Assets in Ethiopia and Honduras

Droughts, hurricanes and other environmental shocks punctuate the lives of poor and vulnerable populations in many parts of the world. The direct impacts can be horrific, but what are the longer-term effects of such shocks on households and their livelihoods? Under what circumstances, and for what types of households, will shocks push households into poverty traps from which recovery is not possible? In an effort to answer these questions, this paper analyzes the asset dynamics of Ethiopian and Honduran households in the wake of severe environmental shocks. While the patterns are different across countries, both reveal worlds in which the poorest households struggle most with shocks, adopting coping strategies which are costly in terms of both short term and long term well-being. There is some evidence that shocks threaten long term poverty traps and that they tend to militate against any tendency of the poor to catch up with wealthier households. Policy implications are discussed in terms of access to markets and the design of government safety net programs.Ethiopia; Honduras; Shocks; Drought; Hurricanes; Assets; Poverty traps; Asset smoothing; Social capital

Commercial Mortgage Prepayments Under Heterogeneous Prepayment Penalty Structures

Much of the literature on pricing commercial mortgages and commercial mortgage-backed securities has assumed homogeneity in prepayment penalty structure. In this paper, we provide evidence that such an assumption is inappropriate and examine the effect of penalty structures observed in actual contracts. After conducting preliminary simulations, we present hazard models estimated from data on 1,165 multifamily mortgage loans to show how empirical prepayment rates vary with alternative penalty structures. While yield maintenance and lockout provisions are relatively more effective than fixed or step down structures in reducing or postponing prepayment, none completely eliminates the risk. Our empirical results generally confirm the theoretical findings of Kelly and Slawson (2001).

How Are Our Kids?: Children and Families in Tallaght West, Co. Dublin

'How are our kids?' It's a simple and straightforward question - one that any parent in Ireland will occasionally ask. In the case of Tallaght West this question is particularly urgent. The research presented in this document shows that the majority of children in Tallaght West are carrying a disproportionate burden of the inequality and poverty whichexists in Irish society as a whole - at least one in three children in this area is likely to beliving in poverty. Before the parents and guardians of these children can answer 'our kids are doing well' change is required and that change must be lasting.This research is part of the Childhood Development Initiative in Tallaght West. We are asking 'how are our kids?' because we know that, on various levels, many are not doing well and we are determined to do something about it. We want to know how these children and families are coping in the midst of challenging circumstances. We want to know exactly what conditions exist that support their developmental capacities, so that these can be built upon. We want to obtain a better understanding of what their actual needs are so that we can advocate for, and put in place, services that meet those needs

PUTTING ‘PRE’ IN ‘SCHOOL’: THE INSTITUTIONALIZATION OF PRESCHOOL IN ELEMENTARY SCHOOLS

This study examines whether the physical location of Pre-K programs—whether in elementary school buildings or stand-alone centers—leads to differences in student outcomes in elementary school. Over the past several decades, public investment in Pre-K programming has burgeoned. According to the National Institute for Early Education Research, 32 percent of all four-year-olds in the United States attend state-funded Pre-K programs (Barnett et al., 2016). As Pre-K programs are taken to scale across the United States, a key concern is ensuring that programs are high-quality and provide significant and persistent effects on children’s school readiness and early schooling outcomes. Researchers are working to identify the components that predict high-quality and effective Pre-K programs, including components such as teacher credentials and measures of classroom quality, so that policies can better promote high-quality programs. Unfortunately, research to date has revealed few consistent and reliable proxies for high-quality Pre-K programs. My dissertation seeks to further investigate potential components of high-quality Pre-K programs by studying the physical location of Pre-K settings—namely, whether or not Pre-K programs are located in elementary school buildings or stand-alone centers. In order to provide evidence on the role of the physical location of Pre-K programs on differences in student outcomes in elementary school, I use a concurrent, explanatory mixed-methods design that combines nationally-representative, quantitative data with in-depth, qualitative interview data from school administrators and teachers in North Carolina. The combination of quantitative and qualitative data enable me to provide a holistic analysis of the phenomena of the physical location of Pre-K programs by providing estimates of the effects of setting type on a range of student outcomes and also providing evidence on the potential reasons for the observed relationships. In the quantitative portion of this dissertation, I used nationally-representative data from the Early Childhood Longitudinal Study- Kindergarten Cohort of 2011 to estimate the impacts of school-based versus non-school-based Pre-K on a range of academic and social-emotional outcomes from kindergarten entry through the third grade. Enabled by the robust set of covariates available in the dataset, I use new propensity score weighting methods that ensure balance on observables between treatment and control groups. In the qualitative portion of this dissertation, I collected data from a convenience sample of elementary school administrators and teachers in central North Carolina to provide in-depth information about the physical location of Pre-K programs. Finally, I concluded my analysis by considering the merged quantitative and qualitative data to explore areas of convergence and divergence. From the quantitative analysis, I find little evidence that school-based Pre-K is predictive of differences in student outcomes in kindergarten through third grade. However, I do find suggestive evidence that co-location—wherein students who attend Pre-K in an elementary school building and remain in that building—have superior outcomes when compared to students who move to attend another elementary school after Pre-K. These findings largely cluster in the academic achievement domains. From the qualitative analysis, I find that there is significant variability between elementary schools in the extent to which schools engage with Pre-K programs in their buildings and support collaborative, vertically aligned environments. Together, these results indicate that the physical location of Pre-K programs, alone, is insufficient for differentiating program quality. I conclude this dissertation with a discussion of my findings in relation to the existing literature, highlight the limitations of my study, and discuss directions for future research in the area of Pre-K location and program quality.Doctor of Philosoph

Comparative Ecological, Morphological, and Behavioral Studies of the Southern Blacknose Dace, Rhinichthys Atratulus ObtuStJS Agassiz, and the Eastern Blacknose Dace, Bhinichtbis Atbatulus Atra\u27fulus (Hermann), in high and low Altitude Streams in West Virginia and Virginia

Comparative ecological, aorphological, and behavioral studies of the southern blaeknose dace, Rhiniohthys atratulus obtusus Agassiz, and the eastern blaokaose dace, B.hiniohtpys atratulus atratulus (Heraann), were made in high and low altitude streaas in West Virginia and Virginia. Statistical comparisons of the morphology of a. a.atratulus and R-.a.-obtusus showed no reliable body character that differentiated the two subspecies. Statistical tests indicated an intergrading population in Gandy Creek, a tributary of the Cheat River, in West Virginia. This was further substantiated by collecting males of the atratulus phenotype along with males of the native obtusus phenotype in adjacent sections of Gandy Creek. Artificial insemination of obtusus eggs with atratulus spera provided developing eabryos for one week. Atratulus and obtusus daoe were observed breeding in identical habitats. The leading behavior of obtusus atratulus and the aggressiveness of atratulus were the only noted behavioral differences between the two subspecies. Stomach analyses of obtusus and atratulus dace, collected on the same day from ecologically similar streams, showed that the two subspecies were eating the same food. A study of an inter grading population did not show two separate breeding populations and for this reason obtusus and atratulus are believed to be subspecies