Verifying the Determinants of the Mortgage Defaults on Home Mortgage

Authors

  • Wei-Wen Wu
  • Jian-Fa Li
  • Cheng-Yih Hong Department of Finance, Chaoyang University of Technology, Taichung, Taiwan

Abstract

Banks face severe challenges pertaining to their operations owing to changes in the financial environment. Identifying methods for reducing mortgage defaults and lowering the ratio of nonperforming loans is crucial. Mortgage defaults occur because of complex factors. The present study developed a DEMATEL (Decision Making Trial and Evaluation Laboratory. The results confirmed that the methods proposed by this study feature high applicability and are able to identify the key factors contributing to the mortgage defaults for commercial banks (CBs) and local banks (LBs). In addition, the methods could verify the determinants of the mortgage defaults for both commercial banks and local banks and uncover the differences that exist between the two patterns of mortgage defaults, and provide valuable information for bank management to make better decisions during the development of loan strategies.

Keywords: Mortgage default, DEMATEL, Decision Making.

JEL Classifications: C02, C18, G32

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Author Biography

Cheng-Yih Hong, Department of Finance, Chaoyang University of Technology, Taichung, Taiwan

Cheng-Yih Hong is an associate professor in the Departmentof Finance at Chaoyang University of Technology inTaiwan. He received his Ph.D. degree in agricultureand resource economics from the University of Tokyo,Japan, in 1995. His research areas include industry correlationanalysis, service management, tourism management,monetary finance theory, agricultural economics,and East Asian regional economics.

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Published

2017-10-31

How to Cite

Wu, W.-W., Li, J.-F., & Hong, C.-Y. (2017). Verifying the Determinants of the Mortgage Defaults on Home Mortgage. International Journal of Economics and Financial Issues, 7(5), 266–273. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/5260

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Articles