Causes of non-payment of mortgage loans: theoretical and practical aspects

Mitrasevic, Mirela and Bardarova, Snezana (2020) Causes of non-payment of mortgage loans: theoretical and practical aspects. UTMS Journal of Economics, 11 (2). pp. 138-150. ISSN 1857-6974/е-1857-6982


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Due to the significant share of mortgage loans in the portfolio structure of a large number of commercial
banks, monitoring the ability of the household sector to repay debts is very important for financial stability.
Since the accumulation of non-performing loans in banks' balance sheets is significantly affected by the fall
in real estate prices, the paper will explain the factors that affect the cycles in the real estate market.The
purpose of this paper is to show research that deals with the causes of non-performance of mortgage loans
and the impact of lending standards on reducing systemic risk. In a period of crisis caused by various
government measures to combat the COVID-19 pandemic, adequate lending standards are becoming even
more important. Special attention in the paper is paid to the influence of LTV raids, the interest rate at which
the loan was approved and the maturity of the loan on the probability of occurrence of default status. The
paper provides a basis for further research that would include the extent to which the application of certain
lending standards has contributed to the reduction of payment delays in the specific business conditions
caused by the current pandemic.

Item Type: Article
Uncontrolled Keywords: theory of default, housing market cycle, Lending Standards
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Tourism and Business Logistics
Depositing User: Snezana Bardarova
Date Deposited: 18 Dec 2020 15:46
Last Modified: 18 Dec 2020 15:46

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