Mortgage Loan Market Segmentation and Lender Pricing Behavior
This study examines the ability of financial institutions to vary rates of return on mortgages by segmenting mortgage loan markets. The research indicates that product differentials do exist among financial institutions. These differences seem to be attributable to instrument-specific characteristics which result from varying levels of intermediation services and exit barriers resulting from lingering regulatory distinctions. Pricing differences as a result of product differences are significant between mortgage bankers and depository institutions which suggests that borrowers are willing to pay a premium for loans offered by banks and thrifts.
Volume (Year): 3 (1988)
Issue (Month): 1 ()
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References listed on IDEAS
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- Curley, Anthony J & Guttentag, Jack M, 1977. "Value and Yield Risk on Outstanding Insured Residential Mortgages," Journal of Finance, American Finance Association, vol. 32(2), pages 403-412, May.
- Robert O. Edmister & Harry E. Merriken, 1988. "Pricing Efficiency in the Mortgage Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(1), pages 50-62.
- Baltensperger, Ernst, 1980. "Alternative approaches to the theory of the banking firm," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 1-37, January.