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An Insurance Approach to Risk Analysis of Debt Home Equity Conversion Programs
Author(s) -
Archer Wayne R.,
Nye David J.
Publication year - 1987
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00427
Subject(s) - equity (law) , home equity , debt , collateral , actuarial science , equity risk , economics , business , public economics , finance , private equity , political science , law
The use of home equity conversion debt creates a compounding obligation against the home that makes collateral deficiency a potentially dominant risk. Using an insurance methodology, an examination of this risk and its impact upon the potential for home equity conversion is conducted. The paper includes a consideration of how deficiency risk and maximum potential benefits are affected by the interaction of household characteristics with demographic and economic factors.