Correlation Between Macroeconomics And The Mortgage Industry.

1563 words - 6 pages

With the Nation in recession, lower interest rates provoke the American population to buy and refinance homes across the country. On the other hand, there may be more mortgage payment default (foreclosures) due to the economic misfortune some people encounter. Much attention has been turned to the housing domain.Over 67% of Americans own their homes. Housing has always been an important sector in the US economy. In 2000, the housing sector as a whole contributed $1.2 trillion to the Gross Domestic Product, or 12.1% of the U.S. economy. Home ownership creates jobs and national wealth not only at the moment a house is built, but also through the time the house is placed on the market, to the time the new owner furnishes and remodels it following the purchase. In 2000, housing construction generated 3.5 million full-time jobs, $113.8 billion in wages and salaries, and $60.9 billion in federal, state and local tax revenues and fees in the US. In 2000, owners of newly built single-family homes spent an additional $5.9 billion on furnishing, decorating and improving their houses in the U.S. (Amita Shah, Pg. 10)Buying a house is the largest purchase and investment in most Americans lives. And for most people, buying a house behooves them to get a mortgage to finance the purchase. The mortgage rate moves together with the long-term bond rates. The interest rate an individual borrower gets also depends on the borrower's credit record, income, the ratio of loan amount to the value of the house, etc. How the United States' housing finance system works is not as lucid as most think, it is a system that involves a lot of different financial institutions and financial instruments that help route investors' funds into the purchase market and obtain additional funds for mortgage lending. It is a system where risks in mortgage lending and mortgage investment are passed on, shared, and managed.The housing finance system consists of three markets: the primary mortgage market, the secondary mortgage market, and the capital market. In the primary mortgage market, mortgages are created and funds are loaned directly to borrowers. In the secondary mortgage market, lenders and investors buy and sell existing mortgage loans and mortgage-backed securities (MBS). In the capital market, investors buy and sell long-term investment vehicles such as mortgages, MBS, stocks, and bonds. Put simply, the capital market is Wall Street. By investing in mortgages and MBS, capital market investors help increase the flow of funds available for mortgage lending. (Internet Reference, in the primary mortgage market are homebuyers. Lenders in the primary mortgage market are mortgage companies, credit unions, life insurance companies, commercial banks, pension funds, and thrifts. The purposes of the lenders include origination, sale, and servicing of the loan. Mortgages are created when a homebuyer receives...

Find Another Essay On Correlation Between Macroeconomics and the Mortgage Industry.

Correlation Between Happiness and Money Essay

2514 words - 11 pages and thoughts are in regards to this relationship. Why our questions are relevant? As previously identified, our team prospects compiling an analysis on a sample size to provide responses to the correlation between happiness and money. In order to analyze the data, we’ve compiled a list of questions for a representative sample size. There is significant importance to these questions so they were carefully chosen to be able to compile what was

Correlation Between Cancer and Latinos Essay

2050 words - 9 pages Latinas is due to late diagnosis and treatment. Ramirez et al credit this to socioeconomic and cultural factors. As part of the largest minority group the psychosocial, linguistic, and other barriers result in wide gaps in access to health care and quality of life. This appears to support the idea of there being no direct correlation between simply being of Hispanic/Latino descent and a cancer diagnosis. There are many other factors to consider

correlation between poverty and crime

823 words - 4 pages Correlation Between Poverty and Crime While driving downtown, a driver takes notice of a thin, dirty, bearded man holding up a cardboard sign which reads, “Will work for food.” This is one of many examples of poverty in our nation. What the driver does next in the situation is purely subconscious; the driver reaches over, rolls up all of the windows of his car, and locks all four doors, this way he is one-hundred percent safe from any harm this

The correlation between sleep patterns and learning patterns of children.

865 words - 3 pages measures were significantly correlated with age in that performance improved with age and that there was a stronger correlation between sleep and the NBF measures in the second-grade group than in the other two groups. There also was moderate but significant correlations between sleep quality measures and specific NBF related to the SDS and the CPT. It was also found that there was a correlation between whether a person was a good or poor sleeper and

The correlation between playing team sports and academic success

1182 words - 5 pages were on a sports team or not, as long as they were physically active. On the other hand, only participation on a sports team appeared to have a connection to a higher GPA in high school males. However, for both male and female middle school students, there was a correlation found between a higher GPA and sports team participation. A similar study (Sitkowski, 2008) examined this topic in another light: how the academic performance of high school

Examining the Correlation Between More Schooling and Better Health

1539 words - 6 pages The second article under consideration is discussing the correlation reflects causality from more schooling to better health. For example, past studies suggest that years of formal schooling completed is the most important correlate of good health; however, the relationship may be traced in part to reverse causality since a longer life expectancy increases the payoffs to investments in schooling and since healthier students may attend school for

The correlation between socioeconomic status and student performance

2580 words - 10 pages Mid Term take Home ExamQuestion 1:The correlation between socioeconomic status and student performance has been consistent for as long as records have been maintained. Students from affluent backgrounds tend to do better in school and on standardized tests than students from economically disadantaged backgrounds. In the following paragraphs, I would like to present two different ways of understanding this pattern. I believe that both

Correlation Between Tattoos and Risky Behavior

3750 words - 15 pages This study will examine the correlation between deviance and tattoos. We hypothesize that there will be a correlation between the amount of tattoos one has and their participation in risky activities. We also hypothesis that people with tattoos, are more likely to engage in sexual activities with multiple partners. The next hypothesis will be that tattooed individuals are more likely to engage in drugs and alcohol usage. An online survey created

Correlation Between Personality and Music Preferences

1291 words - 5 pages universal question. It allows us to explore another person’s musical interest, which would then lead to the basis of a friendship. Not every person is going to have the same taste in music, but why is it that people find a certain genre more appealing than others? A person’s personality and individuality clearly has a large role Research indicates that there is a definite correlation between personality and music preferences (Rentfrow & Gosling p

Correlation Between Drug Use and Suicide

724 words - 3 pages Correlation Between Drug Use and Suicide      America's on-going drug abuse epidemic continues into this millenium, and there are many social problems linked to drug use, including suicide. The disparity of daily life in suburbs or the inner cities are why many people have fallen into their reliance on drugs, including alcohol. Patros and Shamoo (1989) describe the abuse of drugs and alcohol as a 'slow form of suicide.' But many drug

Correlation Between Media Violence and Aggression

2376 words - 10 pages members, the link between aggressiveness and bad attitudes and the media industry will weaken. Nowadays, rating systems are in place to justify the advertising of violent material to teens and younger children, rather than aid parents in determining what they would allow them to watch. The amount of time a young person is exposed to graphic or offensive scenes or stories may never decrease as we become steadily more wired into technological

Similar Essays

Legislation And Predatory Lending In The Mortgage Industry

1779 words - 7 pages Legislation and Predatory Lending in the Mortgage Industry The American Dream has been one of this nation's most enduring ideals of the past half-century. Presumably, every young couple, low-income family, and incoming immigrant hopes to one day produce 1.7 kids, obtain 1.3 cars, and of course purchase the house with the white picket fence. But fulfilling these goals costs money; and the aforementioned groups are among the least

The Correlation Between Homework And Academic Success

3253 words - 13 pages Ample research has been done on the correlation between homework and academic success with many opposing views. Research has shown that homework can be linked to better grades, improved standardized test scores, and more prepared students entering the post-secondary arena; however, this correlation is weak and the opposition has equal ammunition to support that there is no correlation between homework and academic success. There have been

The Correlation Between Schizophrenia And Suicide

818 words - 3 pages providing strong evidence to this correlation between the disorder and action. Why do individuals suffering with this disease have a greater risk of suicide and suicidal tendencies? With the ongoing advancement of technology and medication, how do these individuals lose hope? Is a cure possible?Schizophrenia is a serious psychopathological disorder. Pathologists understand a lot about this disease and the way it works. "Its main symptoms are

The Correlation Between Thinking And Consciousness

1943 words - 8 pages The Correlation between Thinking and Consciousness It inherent to a human being to have the ability to reason and think, but how is it exactly that we go about doing this? Is thinking merely due to input and output, but if so then how come a person can build on previous knowledge? Where is this knowledge stored? Can we "max out" our brain or is it elastic? And is intelligence past knowledge or is that something we come programmed with