Consumer-Lending-and-Bor課件(PPT 49頁)

1、Money and Capital Markets23C h a p t e rEighth EditionFinancial Institutions and Instruments in a Global MarketplacePeter S. RoseMcGraw Hill / IrwinSlides by Yee-Tien (Ted) FuConsumer Lending and Borrowing第1頁，共49頁。 Learning Objectives To see the vital role played by consumers in supplying loanable f

2、unds through savings to the money and capital markets.To learn about the important role consumers play as major borrowers of funds.To explore the characteristics of consumer lending institutions.To understand the rights that consumers have with respect to financial services.第2頁，共49頁。Consumers as Len

3、ders of FundsConsumers as a group are among the most important lenders of funds in the economy.Loanable funds are supplied by consumers individuals and families (households) when they purchase financial assets from other units in the economy.第3頁，共49頁。Financial Assets Purchased by ConsumersSource: Bo

4、ard of Governors of the Federal Reserve System23 - 4第4頁，共49頁。The Growing Menu of Savings Instruments Available to Consumers TodayOne of the most important trends affecting consumer savings and lending today is the explosion of new financial instruments.Many of these new instruments offer the consume

5、r greater financial flexibility, as well as the potential for higher rates of return.第5頁，共49頁。The Growing Menu of Savings Instruments Available to Consumers TodayExamples:NOW accounts / share draftsautomatic transfer services (ATS)share accounts at money market mutual fundsconsumer cash management s

6、ervicesuniversal life insuranceindividual and Keogh Plan retirement accountsRoth and Education IRAsmoney market and market-index CDsvariable-rate annuities and insurance plans第6頁，共49頁。Consumers as Borrowers of FundsSource: Board of Governors of the Federal Reserve System第7頁，共49頁。Is Consumer Borrowin

7、g Excessive?Households and Nonprofit OrganizationsAmounts outstanding at year-end ($ billions)19701980199020002001Total financial2,572.36,643.014,853.933,679.932,097.5assetsTotal debts478.71,455.53,746.87,507.18,083.1(liabilities)Difference:2,093.65,187.511,107.126,172.824,014.4assets -liabilitiesRa

8、tio of18.6%21.9%25.2%22.3%25.2%liabilities to assetsData Source: Board of Governors of the Federal Reserve System第8頁，共49頁。Categories of Consumer BorrowingFinancial analysts frequently divide the credit extended to consumers into three broad categories.Residential mortgage credit used to support the

9、purchase of homesInstallment credit used primarily for long-term nonresidential purposesNoninstallment credit used for short-term cash needs第9頁，共49頁。Home Equity LoansLike traditional home mortgages, a home equity loan is secured by a borrowers home.Unlike traditional home mortgages however, many hom

10、e equity loans consist of a revolving credit line that the borrower can draw on for purchases of any goods or services.第10頁，共49頁。Credit and Debit CardsA credit card permits the consumer to buy now and pay later, while a debit card provides a convenient way of paying now.Convenience users substitute

11、credit cards for cash, while installment users maintain large outstanding credit card balances.A smart card is closely related to the debit card.第11頁，共49頁。The Determinants of Consumer BorrowingThe consumers decision about when and how much to borrow is influenced by:the size of the individual or fam

12、ily income and accumulated household wealththe stage in lifethe business cycleprice expectationsinterest rates第12頁，共49頁。Consumer Lending InstitutionsFinancial intermediaries banks, savings and loan associations, credit unions, and finance companies account for most of the loans made to consumers in

13、the U.S. economy.However, a growing share of consumer loans are being sold off the balance sheets and placed in loan pools (securitization).In recent years, institutions also tend to diversify their lending operations.第13頁，共49頁。Consumer Lending InstitutionsSource: Board of Governors of the Federal R

14、eserve System第14頁，共49頁。Consumer Lending InstitutionsCommercial banks approach the consumerby direct lending,through purchases of installment paper from merchants, and by making loans to other consumer lending institutions.Finance companies have a long history of active lending in the consumer instal

15、lment field, both directly and indirectly.第15頁，共49頁。Consumer Lending InstitutionsSavings and loans and savings banks have long been dominant in residential mortgage lending, though they are also aggressively expanding their portfolios.“Check cashing” companies, “title loan” companies, and “pawn shop

16、s” lend primarily to distressed borrowers.第16頁，共49頁。Factors Considered in Making Consumer LoansConsumer loans usually carry greater risk than most other kinds of loans, although they also tend to be more profitable.Hence, most loan officers carefully considerthe ratio of household debt to gross inco

17、methe duration of employment of the borrowerthe past payment record (credit integrity)ownership of valuable propertiesthe number of breadwinners in the family第17頁，共49頁。Financial Disclosure and Consumer CreditImportant new laws have been designed in recent years to protect consumers in their dealings

18、 with lending institutions, especially with respect to financial disclosure.Consumer Credit Protection Act (1968) (Truth in Lending)Fair Credit Reporting Act (1970)Fair Credit Billing Act (1974)Consumer Leasing Act (1976)第18頁，共49頁。Financial Disclosure and Consumer CreditCompetitive Banking Equality

19、Act (1987)Fair Credit and Charge Card Disclosure Act (1988)Truth in Savings Act (1991)Financial Services Modernization (Gramm-Leach-Bliley) Act (1999)第19頁，共49頁。Credit Discrimination LawsThe civil rights movement has had an impact on the granting of consumer loans.Equal Credit Opportunity Act (1974,

20、amended 1976)Fair Housing Act (1968)Home Mortgage Disclosure Act (1975)Community Reinvestment Act (1977)Financial Institutions Reform, Recovery, and Enforcement Act (1989)第20頁，共49頁。Consumer Bankruptcy LawsThe right to declare bankruptcy is designed to give individuals and businesses a fresh start, h

21、elping them to work themselves out from under a crippling burden of debt.第21頁，共49頁。Consumer Bankruptcy LawsConsumers filing for bankruptcy primarily use one of two methods.Filing for bankruptcy under Chapter 7 normally completely discharges all of a households unsecured debts.A Chapter 13 bankruptcy

22、 filing usually sets in motion a new debt repayment plan to work gradually out of the debts owed.第22頁，共49頁。Consumer Bankruptcy LawsIn view of the soaring number of bankruptcy filings and in an effort to lower the cost of consumer credit for most borrowers, proposals have been made to make bankruptcy

23、 a more costly process and to encourage the development of more financial education courses for consumers. 第23頁，共49頁。Money and Capital Markets in CyberspaceLearn more about the various aspects of consumer lending and borrowing by visiting:/research/http:/webster.state.nh.us/nhdoj/dybdocroot/第24頁，共49

24、頁。Chapter ReviewConsumers as Lenders of FundsFinancial Assets Purchased by ConsumersThe Growing Menu of Savings Instruments Available to Consumers TodayConsumers as Borrowers of FundsIs Consumer Borrowing Excessive?Categories of Consumer BorrowingHome Equity Loans第25頁，共49頁。Chapter ReviewCredit and D

25、ebit CardsThe Determinants of Consumer BorrowingConsumer Lending InstitutionsCommercial BanksFinance CompaniesOther Consumer Lending InstitutionsFactors Considered in Making Consumer Loans第26頁，共49頁。Chapter ReviewFinancial Disclosure and Consumer CreditCredit Discrimination LawsConsumer Bankruptcy La

26、ws第27頁，共49頁。Money and Capital Markets24C h a p t e rEighth EditionFinancial Institutions and Instruments in a Global MarketplacePeter S. RoseMcGraw Hill / IrwinSlides by Yee-Tien (Ted) FuThe Residential Mortgage Market第28頁，共49頁。 Learning Objectives To understand how the residential mortgage market s

27、upplies credit to build and buy homes.To learn about the problems faced by families and individuals in finding credit to finance the purchase of their homes.To see the problems faced by lenders in designing new home loan contracts that will protect them against inflation and other risks.第29頁，共49頁。 L

28、earning Objectives To look at how federal government agencies and government-sponsored mortgage firms support the development of the market for mortgage loans.第30頁，共49頁。IntroductionAmong the fastest growing of all financial markets today is the residential mortgage market, where individuals and fami

29、lies fund their purchases of homes.Originally a simple market that was primarily local and regional in character, the residential mortgage market has become an international capital market where home-mortgage-related instruments are traded around the globe.第31頁，共49頁。Recent Trends in New Home Prices

30、and the Terms of Mortgage LoansAverage Terms Quoted on Conventional Home Mortgage Loans (U.S. Primary Market)1974 1980 1990 2000 Purchase price ($000)$40.10$83.50$153.20$234.50Amount of loan ($000)29.8059.30112.40177.00Loan/price ratio (%)74.3073.3074.5077.40Maturity (years)26.3028.2027.3029.20Fees

31、& charges (points)1.30%2.10%1.93%0.70%Contract interest rate (%)8.7112.259.687.41FHA mortgage yield (%)9.2213.9510.177.45* FHA mortgage yield is for 1999.Data Source: Board of Governors of the Federal Reserve System,第32頁，共49頁。The Structure of the Mortgage MarketData Source: Board of Governors of the

32、 Federal Reserve SystemOutstanding Mortgage Loans in the U.S.$ billionsTotal Mortgage DebtResidential Properties(1-4 family & multifamily)Nonresidential Properties(commercial & farm)第33頁，共49頁。The Structure of the Mortgage MarketFlow of SavingsGovernment loans to mortgage lendersCommercial banks & ba

33、nk holding co.Savings & loan associationsSavings banksCredit unionsReal estate investment trustsInsurance co.Pension plansMutual fundsIndividual domestic investorsForeign investorsConventional home mortgage loansMortgage banksGovernment guaranteed home loansCommercial mortgage loansFarm & ranch mort

34、gage loansPrivate mortgage pools (securitized loans)Federal & federally sponsored mortgage agenciesBuilders & developers of residential & commercial propertiesHome buyers, business firms, & other recipients of mortgage credit第34頁，共49頁。Mortgage Lending InstitutionsSource: Board of Governors of the Fe

35、deral Reserve System24 - 35第35頁，共49頁。Mortgage Lending InstitutionsMost mortgages generate multiple potential cash-flow streams:origination & commitment fees (when a mortgage loan is first applied for)periodic loan repayments & loan interestcompensation for prepayment & default risksservice fees asso

36、ciated with collecting & recording amounts owednet returns & fees from the securitization of a pool of mortgage loans第36頁，共49頁。Mortgage Lending InstitutionsA mortgage loan may beheld in the originating lenders portfolio for the promised interest and principal payments,sold to an investor at a discou

37、nted value (although the originating lender may retain servicing rights and charge the loan purchaser loan servicing fees), orpackaged with other similar mortgage loans into a pool and securitized (the lender receives residual interest income and servicing fees).第37頁，共49頁。The Roles Played by Financi

38、al InstitutionsIn the Mortgage MarketSavings and loan associations (S&Ls) are predominantly local lenders. They often service the mortgage loans they made.Commercial banks rank first as lenders for the purchase of homes, condominiums, and apartments, and in the commercial mortgage sector.Savings ban

39、ks invest in both government-guaranteed and conventional mortgage loans.第38頁，共49頁。The Roles Played by Financial InstitutionsIn the Mortgage MarketLife insurance companies make substantial investments in commercial as well as residential mortgage properties, both nationally and internationally.Mortga

40、ge banking houses act as a channel through which builders or contractors in need of long-term funds can find permanent mortgage financing.第39頁，共49頁。Government ActivityThe Great Depression generated massive, unprecedented unemployment, such that there were thousands of foreclosures, property values f

41、ell, and many mortgage lenders faced liquidity crises.So, the U.S. federal government had to move in to tackle the mortgage markets problems, through government guarantees and the development of a secondary market.第40頁，共49頁。Government ActivityThe major milestones include:1932: Federal Home Loan Bank

42、 System1934: National Housing Act, Federal Housing Administration1938: Federal National Mortgage Association (Fannie Mae)1944: Servicemens Readjustment Act, Veterans Administration第41頁，共49頁。Government Activity1968: Government National Mortgage Association (Ginnie Mae) (Its pass-throughs are popular

43、with investors as safe, readily marketable securities with attractive rates of return.) 1970: Federal Home Loan Mortgage Corporation (Freddie Mac) (Its mortgage-backed securities include mortgage participation certificates (PCs), guaranteed mortgage certificates (GMCs), collateralized mortgage oblig

44、ations (CMOs), and real estate mortgage investment conduits (REMICs).)第42頁，共49頁。Innovations in Mortgage InstrumentsThe problems created by fixed-rate mortgages (FRMs) led to the development of variable-rate mortgages (VRMs) and adjustable mortgage instruments (AMIs).Volatile interest rates also led to the development of convertible mortgage instruments (CMIs) and balloon loans.Rever