Author: Harry E. Merriken

Start Page: 9
End Page: 18
Volume: 3
Issue Number: 1
Year: 1988
Publication: Journal of Real Estate Research

Abstract: This study examines the ability of financial institutions to vary rates of return on mortgages by segmenting mortgage loan markets. The research indicates that product differentials do exist among financial institutions. These differences seem to be attributable to instrument-specific characteristics which result from varying levels of intermediation services and exit barriers resulting from lingering regulatory distinctions. Pricing differences as a result of product differences are significant between mortgage bankers and depository institutions which suggests that borrowers are willing to pay a premium for loans offered by banks and thrifts.