Consumer Response to Adjustable Rate Mortgages: Implications of the Evidence from Illinois and Wisconsin

Mills, Dixie L.; Gardner, Mona J.

doi:10.1111/j.1745-6606.1986.tb00369.x

Cited by 10 publications

(8 citation statements)

References 4 publications

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“…These stages emanate from the first phases of our research (in-depth interviews and group discussions) and from the paradigm derived from the research of Booz, Allen and Hamilton (1982). Support for this construct can also be found in the product development literature (Bowers, 1986;Cooper, 1986;Crawford, 1987;Mills and Gardner, 1986;Nevers, 1972). We conclude from all these sources that information about the customer is essential for development, screening and market launch planning of a new service innovation and is in keeping with the essence of the marketing concept.…”

Section: Findings: Objectivementioning

confidence: 81%

Level of success inputs for service innovations in the same firm

Martin

Horne

1995

International Journal of Service Industry Management

119

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A review shows most of these studies are case or industry specific, address the basic nature of service, are limited to consumer services, or address specific components of the service delivery area. Two exceptions to this are:(1) empirical finding of a dependence on innovations in service industries (Parasuraman and Varadarajan, 1988); and (2) the application of concept testing to new service development (Murphy and Robinson, 1981). However, our review suggests that none of these addresses the process itself and the impact of what goes on in the process to contribute to success or failure. Conversely, the product innovation literature generally considers services as merely an element in the goods and services mix (Booz, Allen and Hamilton, 1982; Crawford, 1991, p. 12; Kotler, 1988, pp. 477-8).We conclude that new services development can be considered an underdeveloped research and theory area, including the delineation of possible reasons for success or failure. However, the evolution by organizations towards major dependence on services plus an increasing intensity of competition and changes in technology lends support to the importance of innovation as a key ingredient for services management.The more robust research concerning product innovations has centred on success or failure by concentrating outside the development process itself

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Section: Findings: Objectivementioning

confidence: 81%

Level of success inputs for service innovations in the same firm

Martin

Horne

1995

International Journal of Service Industry Management

119

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“…Data were collected from 158 students in an MBA program. MBA students were selected partly for the same reasons Mills and Gardner (1986) selected them -their knowledge level about mortgages was expected to be reasonably high, and so they would be able to meaningfully make the choices required by the survey. Four of the responses were deleted from the study due to incompleteness.…”

Section: Resultsmentioning

confidence: 99%

“…The 1980-82 drainage of funds from the mortgage-lending thrift-institutions resulted in the recognition of the need to encourage a widespread usage and acceptance of alternative mortgage instruments (AMIs) and to distinguish them from the historically well known FRMs. These new mortgage instruments shifted the risk of fluctuating interest rates (hence fluctuating costs of funds) from the lender to the borrower (Mills and Gardner, 1986). On the one hand these instruments allowed the lenders to achieve portfolio flexibility.…”

mentioning

confidence: 99%

Consumer trade‐offs among mortgage instrument variables

Talaga

Buch²

1998

International Journal of Bank Marketing

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With the development of increasingly complex mortgage instruments, the process by which consumers choose among these instruments also increases in importance. The real estate literature does not address how consumers of mortgage instruments make trade-offs among the different instruments. The study controlled for interest rates, and looked at five variables: number of points, additional fees, reputation of lender, type of mortgage (FRM vs. ARM), and term in years of mortgage. Using conjoint analysis it is found that consumers do indeed have different preferences for different mixes of mortgage instruments. It is suggested that mortgage instruments can be tailored to different market segments of borrowers.

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“…A study by Mills and Gardner from 1986 showed that the majority of the customers preferred more riskless fixed rate mortgages than the ARM (Mills & Gardner, 1986). In 2008, Bucks and Pence also described the adjustable rate mortgages, especially the part of the subprime adjustable rate mortgages, as more complicated than fixed rate mortgages (Bucks & Pence, 2008).…”

Section: Types Of Mortgagesmentioning

confidence: 99%

Two Approaches to Examine the Impact of Different Credit Default Indicators on Real Estate Loans

Pfalz

2019

Baltic Journal of Real Estate Economics and Construction Management

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Financing of real estates was a trigger of the largest financial crisis after the “Great Depression” from the early thirties in the last century. One of the main causes of this 2007 crisis was poor risk management in real estate financing. The aim of this paper is to examine the impact of different classes of indicators on credit default rates of real estate loans. Two research approaches should confirm a model that proves how strong the relationship is between different predictor variables such as interest rates, macroeconomic and individual indicators on the response variable of credit defaults. The first approach focuses on conducting descriptive and inferential experimental research by collecting secondary data in different markets and by analysing these data for correlations and linear regressions. The second approach is an expert survey of different banks to compare and complement the results of the first research approach. The research provides the evidence that individual indicators and macroeconomic indicators have a higher impact on credit defaults than interest rates. The scientific research on this theme has led to nearly the same results in different markets: the unemployment rate and thus personal conditions are the most responsible predictors for the credit defaults, also in different markets. The novelty of the present research is the proof that a banking survey with primary data on the causes of credit defaults confirms and complements the results of the secondary data analysis.

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Consumer Response to Adjustable Rate Mortgages: Implications of the Evidence from Illinois and Wisconsin

Cited by 10 publications

References 4 publications

Level of success inputs for service innovations in the same firm

Level of success inputs for service innovations in the same firm

Consumer trade‐offs among mortgage instrument variables

Two Approaches to Examine the Impact of Different Credit Default Indicators on Real Estate Loans

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