Suchergebnisse

Housing credit in Indonesia has high growth from 2011. This growth could become excessive growth and cause housing bubble. Therefore, the government implement Loan To Value (LTV) to control mortgages. However, growth of housing credit is still fluctuating and slowing down when the government loosening LTV policy. This condition become the reasons to evaluate the success of LTV in Indonesia. The results using Hodrick Prescott (HP) filter method identified that housing credit several times experienced excessive growth and with Generalized Linear Autoregressive Moving Average (GLARMA) method shows that housing credit to GDP ratio is influenced by previous month and not influenced by LTV policy. Based on these results, Bank Indonesia can combine LTV policy with Debt To Income policy and determine the target of mortgage growth target to succesful housing credit control. Keywords: KPR; LTV; Excessive Growth; HP filter; GLARMA.JEL: C01; E52

AbstractUsing Bayesian Structural Time Series analysis, this study examines the causal impact of loan‐to‐value (LTV) restrictions imposed by the Reserve Bank of New Zealand in October 2013. By incorporating state‐space components, such as local linear trend, seasonality and regression, counterfactual values of house price indices are predicted. Surprisingly, the study reveals that the implementation of LTV restrictions had no significant effect on national house price indices, contradicting prior Central Bank studies that reported a nearly 3 percentage‐point decrease in housing cost inflation. This contradictory evidence challenges existing perceptions of the effectiveness of LTV restrictions in curbing house price inflation.

Evaluates the benefits and disadvantages of attempting to prevent excessive rises in house prices by applying an adjustable loan-to-value (LTV) ratio by a macroprudential supervisor such as the European Systemic Risk Board. Outlines the justifications for capping the LTV ratio, and reflects on the political and public pressures such a cap would create for the supervisor, including the risk of excluding first-time buyers and the need to take account of local arrangements in various Member States.

Abstract
A decision not to prohibit or limit high-risk mortgage products in Ireland in 2005 reveals the extent to which three important factors – interests, institutions, ideology – impact on information processing by decision-makers, and reveals irrationality or otherwise in the process. This article summarises the events leading up to the bad decision on 100 per cent loan-to-value (LTV) mortgages in November 2005. This case reveals the nature of the interaction between government departments, regulators and banks at a critical time before the crash, and shows how a department's interests can interact with institutional factors, and the ideological context, to prompt poor rational and irrational information processing, and lead to a bad decision. In particular, the dominance of a market ideology which raised the threshold for what information was necessary before intervention would be made, combined with the low institutional standing of the department seeking intervention, produced a suboptimal outcome. Finally, the case provides evidence of irrationality (e.g. groupthink, herding) within institutional actors, rather than between them.

As a rule, long-term bank loans entail solid security - a mortgage, regardless of their purpose. The mortgaged property has its specific market value during the loan approval period but during the repayment period, the value of the real estate varies. This is the reason why the initially specified indicator of the coverage of loans with the value of the mortgage - the LTV ratio changes, which in turn increases the risk of loan repayment. The aim of this paper is to draw attention to the necessity of establishing adequate initial LTV ratios (together with other important ratios). This would help nullify the risk of any variations in real estate prices, the loan currency risk, the interest rate risk, as well as the risk of an increase in bank's claims because of a long foreclosure process. The paper analyses effects of changes in LTV ratios caused by varying circumstances using the case study method. The comparative method analyses the changing trends of data on the LTV ratios for the already approved loans over a seven-year period by comparing the flow of the loan capital sum with the real value of the mortgage for three types of loans. The conclusion reached is that commercial banks should establish the initial LTV ratio for various long-term loan products and thus prevent its rise. Banks should do this by taking into account all the factors that cause the ratio's increase, and thus give preference to the reduction of the credit risk and not the attractiveness and accessibility of loan products.