Hedging GNMA Pass-Throughs

Article Abstract:

The Chicago Board of Trade has traded future contracts of the Government National Mortgage Association (GNMA) for nine years. GNMA futures were among the first in the market, which now accounts for about half of all futures' trading. GNMA has not kept up with the profitability of other financial futures, probably because they have not been popular hedges. Other financial futures have overcome the stigma of unfamiliarity, but the complex nature of GNMA has hurt its popularity. The two most important elements of GNMA are the principal paydown and the futures contract specifications, which involve collateralized depository of factors: maturity and volatility, two factors which can be combined through statistical regression analysis into one step. Scheduled and unscheduled principal paydown considerations are analyzed. A table of pool speeds and rates is featured. Risk conditions for hedging with factors are analyzed.

Chicago Board of Trade (Illinois, United States)

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Flat tax flattens homeowners

Article Abstract:

The flat tax system proposed by Rep. Richard Armey removes mortgage interest and property tax deductions. Some analysts believe that removal of the mortgage interest and property tax reduction will drop home value by 15%, which is approximately $1.7 trillion in terms of home equity reduction. Furthermore, uncertainty over the system's impact on interest rates made analysts wary over flat tax implementation.

Economic aspects, Real property tax, Real property taxes, Flat tax

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Boom eludes rural homeowners

Article Abstract:

A report from the National Rural Housing Coalition shows that people in rural areas are more likely to own their own homes than those who live in urban or suburban areas but a disproportionate number of rural households live in substandard housing.

Reports, Homeowners, National Rural Housing Coalition

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