1) What topics were the most frequently listed?  

  2) Are there valuations that involve two important kinds of partial interests?

  3) What do some searchers use a single-period contingent claim analysis for?

  4) Do results suggest that the straight-line depreciation assumption implicit in the age-life method?

  5) When did the impact of inflation expectations on estimated market values lead many lenders and equity investors to the use of value models?

Find the English equivalent s of the following Russian

Phrases in the text.

1) Теоретический интерес;  

2) оценка снижения стоимости; 

3) исследовательская работа;   

4) неоднородность междугороднего ценообразования;   

5) дополнительное вознаграждение за риск.

Fill in the gaps with the words from the box.

Each word can be used only once.

1) The post-ERTA blossoming of limited __________‚ increased foreign __________‚ the securitizing of both debt and equity real estate financing.

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2) What __________ topics do you consider most __________ for research?

3) Valuing limited __________ and special use __________.

4) Two-price market may exist‚ one price for __________‚ another for __________ else.

5) While some of the __________are found within the standard bundle of physical and geographical variables‚ of particular interest are their results with respect to __________ versus plottage value.

Circle the Odd Word Out.

1) Blossoming‚ following, securitizing;

2) complexity‚ directly, significantly;

3) for‚ on‚ the;

4) cost‚ returns‚ transaction;

5) estimate‚ risk, value.

Translate the sentences into English

using indefinite pronouns.

1) У нас есть несколько предположений.

2) Некоторые из них работали в вашей компании пять лет назад.

3) Инженер нашёл какие-то ошибки в вашем плане.

4) У этого участка было приблизительно три владельца.

5) Планировщики не заметили никакой разницы в ваших проектах.

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Mortgage Lending

Loan administration costs and the costs of search for information about risk are found to be determinants of spatial interest rate differentials. These costs are independent of money loan sizes; therefore, rational lending policies can produce higher interest rates (or lower term to maturity) in low-income communities. But the premium (lower maturity) should be related to lower loan size and risk differentials.  Public policy should be directed  toward  compiling  and

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verifying an information bank which would allow lenders to search efficiently for information about risk.

Lenders providing credit to individuals specialize according to perceived risks. For example‚ finance companies specialize in high risk loans and loans with high collection costs whereas commercial banks seek lower risks and costs; therefore‚ finance companies typically charge higher interest rates than banks. This behavior has an implicit or explicit spatial dimension‚ e.g.‚ the customers are clustered in space and the lender establishes branches in proximity to a chosen market segment. Models which focus on spatial segmentation are particularly suited to dealing with mortgage lending because of the explicit spatial distribution of the collateral.

The risk-return tradeoff should be the same in all areas. Empirical studies have attempted to test for mortgage deficiency (lending behavior which discriminates against low-income and monitory areas) by relating mortgage terms (interest rate‚ maturity and loan-to-value ratio) or rejection rates to variables measuring borrower and neighborhood characteristics.

A model of lending within the framework of monopolistic competition across space allows the derivation of interest rates as a function of both supply-side and demand-side variables. Previous studies have recognized that mortgage deficiency can be explained by lack of demand as well as by perception of risk by lenders. But studies which include demand-side variables have not derived their estimating equations from profit and utility maximization.

Spatial variations in mortgage lending are a function of: 1) loan administration costs and 2) the costs of search for localized information about risk. Both costs are independent of money amount of loan demand‚ where loan demand is the average loan size times the number of loans. Revenues‚ on the other hand‚ are directly proportional to demand; therefore, neighborhoods with large demand can cover costs with lower rates.

Exercises