Rationales of mortgage insurance premium structures

Journal of Real Estate Research, The,  1997  by Barry Dennis,  Chionglong Kuo,  Tyler T Yang

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We find that an important determinant of the effect of premium structures on borrowers and insurers is the extent to which either of the two forms of subsidization is inherent in the structure: (1) termination year subsidization and (2) extra defaulter subsidization. Interestingly, the same premium structure may have very different subsidization implication for prepayers and defaulters.

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Barry Dennis* Chionglong Kuo* Tyler T. Yang*

+1997 Real Estate Finance award, sponsored by the Fannie Mae Foundation.

*Price Waterhouse LLP, 1616 N. Fort Myer Drive, Arlington, Virginia 22209.

Copyright American Real Estate Society 1997
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