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The article highlights more accurate ways of protecting both the solvency of thrift institutions and the flow of funds into the mortgage market, and suggests a solution to the thrift-institution-mortgage-market problem which is to provide thrift institutions with the benefits of variable rate mortgages (VRMs) and mortgagors with the benefits of fixed rate mortgages (FRMs). The author analyzes the solvency problem attached to these models which is the failure of thrift institutions to forecast deposit rates with a high degree of accuracy.

The article comments on the use of variable mortgages (VRM) in the U.S., and presents the arguments of the advocates of VRMs who argue that they offer a reduction of risks to lenders, and their critics who argue that the risks are simply shifted to the consumer. The author weighs the success of variable rate mortgages in the U.S. and abroad and considers whether there will be common use of VRMs in a properly functioning capital market. The author theorizes that his use of variable rate mortgages in other parts of the world may have been exaggerated since the variable rate clause is included in the standard home mortgage contract in Great Britain and in Sweden.

This study is based on a data record developed for 7,609 mortgage originations by one of Pittsburgh's leading mortgage lenders through the resources of the Federal Savings and Loan Insurance Corporation. Cohort analysis is used to construct continuous delinquency rates for mortgages made from 1961 through 1972 on single-family homes located within the Pittsburgh SMSA. This grouping technique combines mortgages with like combinations of characteristics and allows annual delinquency rates to be calculated on the mortgages in each cell. These rates are then regressed on the variables used in the construction of each cohort. Because any collinearity that may exist between the explanatory variables in the ungrouped data is eliminated through the construction of cohorts for all possible combinations of variables, if at least some of the unusual combinations can, in fact, be found in the sample, this technique is designed to yield coefficients whose statistical significance can be tested precisely. [ABSTRACT FROM AUTHOR]

The article examines the impact of credit availability on the U.S. housing market. In the U.S. and Western Europe policymakers have attempted to increase housing stocks by making mortgage credit more readily available to consumers. The author presents analysis demonstrating such policies have not been effective. Over the long term housing stocks and other assets have grown at roughly the same rate, and considerably below the rate of increase of mortgage credit. Neither subsidies to mortgage borrowers nor greater availability of mortgage loans appear to have an impact on the distribution of real assets.

One of the oldest forms of financial regulation in the United States is the usury law. At the present time there are statutes governing the maximum allowable interest rate which a lender can charge an individual on a residential home mortgage loan in all but five states. These statutory rates vary appreciably among the states ranging from a low of 7-1/2 per cent in New York, New Jersey, and Vermont to a high of 21 per cent in Rhode Island. During recent years, usury limits in many of the states have remained inflexible in the face of rising market interest rates. As shown in Table I, sixteen states and the District of Columbia had general usury limits on home mortgage loans of eight per cent or less during 1970. This was below prevailing mortgage rates for the nation as a whole. Although a number of the states, particularly those with lower ceilings, exempt FHA and VA mortgages from the statutes, there is a Federal limit imposed on such loans which is generally below prevailing mortgage rates as well. However in 1970, when the FHA-VA ceiling rate was 8-1/2 per cent, usury limits in states like New York were a full percentage point below the Federal limit. The purpose of this paper is to investigate empirically the relation between "unduly low" usury ceilings and the level of single family homebuilding. Using cross section data for a sample of 77 Standard Metropolitan Statistical Areas (SMSAs) for the year 1970, a model is constructed which relates the quantity of single family housing starts to a number of important economic and demographic determinants including real per capita income, population levels, population growth, population density, housing prices, and a dummy variable measuring the impact of low usury ceilings. The model is estimated using ordinary least squares techniques and the results indicate that in SMSAs where statutory rates lie below market rates, the level of single family home-building is, on average, approximately 28 per cent lower ... [ABSTRACT FROM AUTHOR]

Since the late 1960s California's share of nationwide residential construction and mortgage lending has receded from its postwar levels. The relative decline reflects slower population and economic growth in the state. Market adjustments to these changed conditions seem to be largely completed. Housing and mortgage-lending activity remains impressive except by comparison to the 1950s and early 1960s. However, California's dependence on out-of-state funds for mortgage investment will be greatly diminished in the long run. [ABSTRACT FROM AUTHOR]

The article discusses the equilibrium spread between variable rates and fixed rates on long-term financing instruments. The author states that one of the most important innovations in bond financing and in mortgage lending has been the quick adoption of variable-rate instruments as of December 1973. He explains that notes and bonds which have an interest rate between one and two percentage points above the prime rate are common in corporate financing. The article states that the Federal Home Loan Bank Board endorsed the variable-rate concept and the Federal Home Loan Mortgage Corp. is preparing guidelines for secondary market operations in variable-rate mortgages.

This study examines the effects of affiliation between two types of financial institutions--mutual savings and commercial banks. Attention is limited to determining whether (1) affiliation per se and/or (2) the degree or type of affiliation is related to commercial bank output in either the time and savings deposit or residential real estate loan markets, the principal markets of the savings banks. [ABSTRACT FROM AUTHOR]

The article examines the relationship between the demand for mortgage loans and demand for Federal Home Loan Bank (FHLB) advances on the part of savings and loan associations in the U.S. The author constructs a loan-offer function for savings and loans, and confirms it using actual yearly data for new loan acquisitions for the period 1964-1969. Analysis is presented illustrating conditions under which a bank will seek additional funds from the FHLB, and implications for FHLB policy are discussed.

This article examines relationship between Savings and Loan Associations (SLA) deposit rates to changes in the yield on mortgages. Since their portfolio consists almost entirely of mortgage loans, SLAs would appear to have a simple and clear relationship between the interest rate paid for deposit funds and the yields they obtain on earning assets. Research has shown the this to not be the case, however, and the author analyzes two competing opinions on the matter from Gerald Weber and Paul Meyer.

This paper has added to the small body of data on rates of return on equity investment in real estate by combining data on insurance company loans over $100,000 with assumed values of parameters for the equity investor. The returns which result are computed before and after financing and before and after tax. The purpose of this paper was to present the equity returns rather than to editorialize on the adequacy of the rates. In this regard the paper concludes with the reminder that the rates of return are hypothetical since they are based on assumptions and not on historical analysis of realized returns by actual investors. With this in mind, it is hoped that the return relationships will be of use in investment research and planning. [ABSTRACT FROM AUTHOR]

This article presents information on regional growth disparities and the mortgage market in the U.S. The author examines research on the mortgage market that suggests that regional differences in the interest rates of residential mortgages is the result of successful market operation. The author attempts to answer the question of why regional differences in the amount of risk faced by mortgage lenders exists. The author believes these differences are the result of regional growth disparities and that this research will provide insight on the financial consequences of such disparities.

This article investigates the default risk on U.S. Federal Housing Administration (FHA) home mortgages and links the level of risk with the structure of the financing program. The author's findings suggest there is a great deal of variation in the risk characteristics of mortgages insured by the FHA. The findings also indicate that new 30-year mortgages are riskier than 20-year mortgages and that new 30-year mortgages are riskier than existing 30-year mortgages. The author believes that loan financing characteristics have the largest impact on the variations in risk on FHA mortgages.

The article presents commentary on the issue's featured reports on mortgage lending and the investment portfolio management of financial institutions. The reports cited include "Some Relationships Between Assets and Liabilities of Thrift Institutions," by Sherman J. Maisel, "Private Secondary Market Facilities," by Oliver Jones, and "Institutional Aspects of Interregional Mortgage Investment," by Halbert C. Smith. Market conditions cited within the reports are expounded upon, describing trends suggesting lower mortgage fund levels. Implications of such market conditions on the theories presented are described.

The article presents commentary on the issue's featured reports on mortgage lending and the investment portfolio management of financial institutions. The reports cited include "Some Relationships Between Assets and Liabilities of Thrift Institutions," by Sherman J. Maisel, "Private Secondary Market Facilities," by Oliver Jones, and "Institutional Aspects of Interregional Mortgage Investment," by Halbert C. Smith. Each is critiqued in turn individually, with concluding remarks on the broad economic conditions within the U.S. surrounding market inefficiencies and the housing cycle shifts of 1966.

The article focuses on regional disparities between mortgage markets within the United States in the 1960s. The economic conditions of isolation between regions manifesting mortgage capital availabilities and shortages are described. The theoretical establishment of equilibrium through interregional lending mobility is discussed and questions are raised addressing why such behaviors have not occurred. Specific research is offered regarding life insurance company policies and attitudes regarding regional practices and profit-seeking objectives.

The article discusses the reports "The Major Developments in the Market for Consumer Credit Since the End of World War II" by Robert P. Shay, and "The Major Developments in the Financing of Residential Construction Since the End of World War II" by M. Carter McFarland. The author comments on Shay's report which describes how families move up the economic ladder to be in the position which enables them to borrow, and complements McFarland's for providing an analysis of the mortgage credit industry in the 1950s when supply of mortgage funds caught up with the demand for housing.

The article presents a critique of a study by Edward E. Edwards called "Changing Character of the Real Estate Mortgage Markets" that appears in this issue. The author argues that mortgage credit is either overlooked or underassessed by the capital market. By looking at the figures from 1952 to 1962 it was found that mortgage debt increased so much that the net expansion of this debt was greater than long-term investments like bonds, foreign securities, and new equity issues. Another point made by the author is the growing competition amongst lenders for consumers looking for a mortgage.

A conference paper on expectations for the U.S. mortgage market in 1964 is presented. It is thought that the market is in good economic health due to general increases in income and savings and business activity has been steady. Another factor to consider is the amount of new home construction, which it is believed may increase as will the demand for housing among would-be homeowners.

The article reports on mortgage market prospects in the U.S. during 1959-1963. The mortgage market experienced a decline in 1960 which resulted in financial stringency rather than financial ease, reduced flows of funds, and interest rate declines. The level of saving during this time was greater than had been expected despite the slow rate of expansion. In 1962 was forecasted to have a supply of funds which would be lower than demands so that a rise in mortgage rates resulted. This was because of an amendment in financial law termed the 'Regulation Q' which increased competition for individuals' saving.

The article focuses on the relationship between interest rate structures and mortgage loans. Generally supported principles asserting the uniformity of stated and effective interest rates to comparable mortgage loans and that interest rates vary concerning other mortgage contract differences are outlined. Case data is presented from commercial banks in Chicago, Illinois from 1960 for the purpose of evaluating these principals. It is concluded that most interest rates do directly relate to loan to value ratios, but are not otherwise uniform over short term periods.

The article comments upon two articles about mortgages in the U.S. which appeared in this issue, "Financing the Rebuilding of Our Cities," by Louis Winnick, and "The Development of an Effective Secondary Mortgage Market," by Oliver Jones. The author discusses impediments to a fair evaluation of mortgage markets both regionally and nationally because of a lack of available statistical information. The author also explores the idea of unifying mortgage regulation and the influences of capital markets and free markets upon the mortgage industry.

The article focuses on mortgage warehousing in the United States and short-term credit or warehousing loans which are given to real-estate lenders in the non-banking sector. The interim loans from commercial banks are classified as three general types of warehousing loans--committed-technical, uncommitted-technical, and committed-institutional. The reaction of the Board of Governors of the Federal Reserve System to potential inflationary concerns resulting from warehousing is mentioned. The types of warehousing arrangements, social benefits of warehousing loans, restrictions on warehousing credit, and sources of economic elasticity are discussed.

The article refers to "The Impact of Federal Mortgage Insurance Programs on Ann Arbor's Home Mortgage Market, 1956," a survey by James C. T. Mao, and provides information about small-city mortgage markets. Statistics are given for the lending volume in Middletown, Connecticut and Hagerstown, Maryland--two cities where institutional lenders participate in the Federal Housing Administration and Veterans Administration loan programs which insure or guarantee mortgage loans. The relationship between the size of financial institutions and proportion of their mortgage portfolios is mentioned, as well as research by J. E. Morton, "Urban Mortgage Lending: Comparative Markets and Experience."

The article discusses institutional arrangements in mortgage lending in the U.S. The author states that the use of an investment vehicle law developed in the form of negotiable titles to corporate property is a financial mechanism that helps promote the mobility of capital. The author explains that the financial community has created several devices concerning contractual arrangements in the mechanics of distributing government-underwritten mortgages. Several tables are provided to help illustrate the study.

The article discusses the impact of mortgage insurance provided by the U.S. government. The author proceeds along four distinct avenues of inquiry. Have federal guarantees significantly alleviated stress on the financial system by protecting borrowers from the worst effects of an economic downturn? Have government programs lowered the costs of home ownership and its associated risks? Are speculation and excessive credit reduced by federal involvement? Are capital markets more robust due to the increased marketability of mortgages made possible by federal insurance?

The article examines junior mortgages in real estate financing. Although reference is made to a study performed by Professor Fred E. Case on the Los Angeles County market, the bulk of the article centers on an analysis of data compiled for Middletown, Connecticut for the period 1945-1952, along with a sampling of pre-war years beginning in 1920. Various figures are presented and analyzed for the Middletown market, including general loan data, volume of lending, type of property involved, etc. Several similarities emerge with the Case study, including the fact that junior mortgage lending experienced notable growth after 1950.

The article focuses on the characteristics and benefits of junior mortgages in real estate financing. Exploration is offered into the general characteristics of secondary mortgages within the financial structure of the U.S. Statistical analysis is offered of mortgage trends in the 1950s, questioning whether the phenomena were circumstantial of particular housing development bubbles or indicative of larger financial characteristics of the real estate finance market. Conclusions are offered distinguishing general junior mortgage behaviors and calls for future studies are offered.

The article investigates how the structure of local mortgage markets affects the use of Federal Housing Administration (FHA) and Veterans Administration (VA) mortgage financing programs. The author examines data compiled in a 1950 report for the largest 25 metropolitan areas in the U.S. Several findings emerge. Life insurance firms and commercial banks are significant participants in FHA and VA programs. Savings and loan associations, on the other hand, offer little support for FHA financing. The author's analysis highlights the importance of market structure--particularly the types of financial institutions most active in the local mortgage market--to the effectiveness of federal housing initiatives.

The article presents an exploration into the analysis of the gross flow of capital funds with regard to the residential real estate market of the U.S. A review of data is provided of mortgage loans and equity funds applied to residential acquisitions between 1911-1952 to demonstrate the necessity of determining gross flow rather than simply examining net changes in debt in order to address questions of internal-external debt ratios and trends of debt and equity financing by consumers. Additional questions are asked concerning the influence of construction as well as the purchasing of previously developed property.

The article presents a brief history on the federal mortgage lending and insuring practices in the U.S. The federal government has been a involved in the mortgage industry, beginning with the creation in 1932 of the Home Loan Bank System. Later, the Federal Farm Mortgage Corporation, the Home Owners' Loan Corporation and the RFC Mortgage Company were created to aid homeowners during the Great Depression. The Federal Housing Administration was the next step and struggled to find the proper amount of involvement in the housing markets.

The article examines the practices of residential mortgage lenders in the United States. It is reported that the period following World War II was a period of expansion for residential housing. The article explains that commercial banks are the most familiar group of residential mortgage lenders, while the most important residential mortgage lenders in the United States has become savings and loan associations. Another popular residential mortgage lender in the United States are life insurance companies, which have become the largest receivers and investors of long-term savings of individuals.

The article focuses on the considerations of federal participation within the housing market of the United States within the 1945-1950 period. Particular intervention and control over the direction of the mortgage financing process is cited and identified as an important subject of evaluative study. Case data taken from the San Francisco Bay Area is provided and analyzed to highlight examples of typical federal involvement. The roles of the Federal Housing Administration, Federal National Mortgage Association, and Veterans Administration in the home loan market are each discussed. Conclusions are offered citing elements of the federal policy which are advantageous and which are undesirable.

The article presents commentary and criticism on the reports by R. J. Saulnier, Ernest M. Fischer and L. Douglas Meredith, included within the issue discussing the structures and management of the mortgage financing market of the United States. Comments and summaries of each report are given individually, including Meredith's views of "full payment" trends, Fischer's comments on the management of the Federal National Mortgage Association, and Saulnier's evaluation of the overall condition of the mortgage finance market.

This article focuses on the financing of home and business (nonfarm) real estate purchases. The article addresses five reasons for the U.S. shortage of housing stock post World War II. The article notes the growth of incomes, the spreading out of families among dwelling units due to increased income, increased rate of family formation, and availability of inexpensive financing for real estate purchase. The article notes the high level of housing starts that are complicated by the unequal number of housing completions, and considers the costs, risks, and yields of mortgage lending.

The article discusses the financing of mortgages in California in 1967 using information gathered from the period of 1950 to 1965. California's growth during the period has been funded largely by investments made from "foreign funds" originating outside the state, since the state has grown faster than internal savings can fund. The use of funds from outside the state means that California has had to pay higher mortgage interest than the national average. The author predicts the mortgage and housing markets in California for 1970.

The author discusses housing market trends in California from 1950 until 1965 and predicts future growth. He also analyzes how such changes will effect the savings and loan (S & L) banking industry. In California, the share of mortgages held by S & Ls has increased in comparison to other residential mortgage debt holders, which is predominantly attributable to federal legislation enacted after World War II which restricted banks from making loans with low value to loan ratios compared to those allowed to S & Ls. Housing starts were down in 1966 compared to previous years.