IDEAS home Printed from https://ideas.repec.org/p/arz/wpaper/eres2003_280.html
   My bibliography  Save this paper

The Risk-Free Period on Mortgage Business

Author

Listed:
  • Jesus Trello
  • Serret Alfredo

Abstract

Let us define method as Ïthe process which is follow by science to discover the truth and to demonstrate itó2. We believe that in the mortgage business, methods should be used that permit the calculation of the true real risk which is borne in the financing of housing with mortgage guarantees. The objective of this paper is to search for and to measure the risk in mortgage activity in order to answer the key question: when is the point in time in the life of the mortgage after which the maximum receivable debt for a mortgage loan (ML) is always less than the current value (CV) of the mortgage guarantee if the loan is foreclosed? The aim of this paper is to introduce the concept of ÏRisk-Free Periodó into the methodology for analysing housing mortgage loans, which can be extended to any type of property guarantee. The objective is to demonstrate that after a specific moment in time in the life of all mortgage loans, the possibility of losses through default is zero, because the outstanding receivable debt (the outstanding capital plus the accrued interest receivable and foreclosure fees) is covered by the sum awarded after foreclosure though public auction of the property which was put up originally as a guarantee of the mortgage loan.

Suggested Citation

  • Jesus Trello & Serret Alfredo, 2003. "The Risk-Free Period on Mortgage Business," ERES eres2003_280, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2003_280
    as

    Download full text from publisher

    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2003-280
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arz:wpaper:eres2003_280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/eressea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.