Sentences with phrase «default event risk»

Is Default Event Risk Priced in Corporate Bonds?

Not exact matches

Investors should monitor current events, as well as the ratio of national debt to gross domestic product, Treasury yields, credit ratings, and the weaknesses of the dollar for signs that default risk may be rising.

Homeowners pay mortgage insurance to cover risks to Fannie Mae or Freddie Mac in the event that you default on your loan.

We also consider the risks in countries where deposits may not be protected by government guarantees in the event of a bank default.

However, they also risk losing the pledged asset in the event of default, so proceed carefully.

The credit default swap synthetically transfers credit risk on the portion of the $ 6 billion reference portfolio from GSCM to the ISSUER with respect to credit events.»

A lack of portfolio diversification increases an investor's risk to such default events, but there are ways to mitigate that risk:

The interest rate tends to be higher, since a second mortgage is a bigger risk for a lender (in the event of default, your first mortgage is the one that gets paid off).

You'll have more options (and get better terms) for a house with a high appraised value and a low mortgage balanceits a low - risk loan for a bank to recoup its loss in the event you default on the loan.

According to the SEC (2013) the key risks of corporate bonds are default risk (also referred to as credit risk), interest rate risk, economic risk, liquidity risk and other significant risks including call and event risk.

In return, the risk «buyer» agrees to pay the «seller» a set amount if there is a default (technically, a credit event).

With an insured mortgage the lender transfers their risk of lending to the insurer in the event of default by the borrower.

To help guard against the risk of default, some disability income insurance providers offer an optional student loan rider to help young professionals make their loan payments for a fixed number of years (often 10 or 15 years) in the event they should become temporarily disabled.

Generally rates for these types of mortgages are significantly higher due to risk of the lender not being able to recover funds in the event of default.

Being in the real estate business, home equity lenders can not take on risk above the maximum 85 % as it only reduces their chances of recouping in the event of default.

With this perspective in mind, it is in the best interest of investors themselves to reconsider the level of risk premium they demand, or else they must be prepared to fight over debt collections in the event of a default.

This means that in the event where you default a loan, there is zero risk of losing your assets.

The clearing house becomes the buyer to each seller, and the seller to each buyer, so that in the event of a counterparty default the clearer assumes the risk of loss.

«FHA can no longer tolerate putting taxpayers at risk by allowing obligations like these to be placed ahead of the mortgage itself in the event of a default.

Canadians households are stretched thin already, and heavy debt burdens are putting more Canadians at risk of financial default in the event of interest rates increases, unemployment or other economic hardships.

The lender runs lower risks when lending against collateral because in the event of default the property securing the loan can be repossessed or subject to foreclosure.

Government Guaranteed: In reference to USDA (Rural development mortgage guaranteed by the Federal government) loans which the USDA will repay in the event of a default and VA (Veterans Affairs guaranteed) loans which the VA will repay in the event of default, offer 100 % financing options but with less risk to the lender because of the government guarantees.

-- Courts are the governmental «default» option — if you don't provide for ADR in advance through a dispute resolution clause in your business contract, then in the event of a dispute (at which point the two sides usually can't agree to anything), parties typically resort to court, thereby subjecting themselves to the considerable expense, risk, delay, distraction, inflexibility, and often irrationality of the court systems.

Here, the buyer risks being liable for breach of contract damages in a civil lawsuit (again, this depends on the contract — some contracts only allow a seller to keep the deposit in the event of a default by the buyer) unless he or she can prove a legal basis for backing out of the deal.

Banks are typically averse to underwriting non-recourse loans as it means assuming more risk on their part as this type of loan only allows them to foreclose on the property in the event of a default, and does not allow them to seek additional money from the borrower if the proceeds from the foreclosure are less than what is owed on the loan.

* On an overall basis, the report states that while «global tail risks have diminished (meaning the risk of a systemic shock to the global financial system that could be caused by an event like a sovereign debt default), the global outlook is slightly weaker than projected in October».

In addition, the lender faces the risk that the value of the property underlying the mortgage could drop in value to below the outstanding balance on the mortgage; if this event induces the borrower to default due to moral hazard, the lender must not only incur the costs of implementing a foreclosure but also must sell the property at a price that fails to recoup the lender's investment.