Questions from Financial Markets

Q: Many banks offer lines of credit that are secured by a second

Many banks offer lines of credit that are secured by a second mortgage (or lien) on real property. These loans have been very popular among bank customers. Why are homeowners so willing to pledge thei...

Q: The reverse annuity mortgage (RAM) allows retired people to live

The reverse annuity mortgage (RAM) allows retired people to live off the equity they have in their homes without having to sell the home. Explain how a RAM works.

Q: What is a securitized mortgage?

What is a securitized mortgage?

Q: Describe how a mortgage pass-through works.

Describe how a mortgage pass-through works.

Q: A bank has two, 3-year commercial loans with a

A bank has two, 3-year commercial loans with a present value of $70 million. The first is a $30 million loan that requires a single payment of $37.8 million in 3 years, with no other payments until th...

Q: What distinguishes the mortgage markets from other capital markets?

What distinguishes the mortgage markets from other capital markets?

Q: Most mortgage loans once had balloon payments; now most current mortgage

Most mortgage loans once had balloon payments; now most current mortgage loans fully amortize. What is the difference between a balloon loan and an amortizing loan?

Q: What features contribute to keeping long-term mortgage interest rates low

What features contribute to keeping long-term mortgage interest rates low?

Q: What are discount points, and why do some mortgage borrowers choose

What are discount points, and why do some mortgage borrowers choose to pay them?

Q: The Brazilian real is trading at 0.375 real per U

The Brazilian real is trading at 0.375 real per U.S. dollar. What is the U.S. dollar per real exchange rate?