US Mortgage - lending is a major category of business In USA. Mortgages are simply the commercial papers and assigned freely to the other holders.
In USA the Federal Housing Administration administers the programme which is known as
Ginnie Mae,Fannie Mae and Freddie Mac(also known as GSEs or Government
sponsured entities) to foster mortgage lending and to encourage home ownership
and construction.Thi programme work by buying a large number of Mortgage from
banks and issuing mortgage backed bonds to investors known as MBS or Mortgage
Backed Securities.
US Mortgage Process
In USA the process through whichMortgage are secured by the borrowers are called origination. Herethe borrower submits an application anddocumentation relating to his/her financial history to the underwriter.
Presently Many banks are now offering "no-doc" or "low-doc"
loans in which the borrower is required to submit only minimal financial
informations.Such type of loans carry comparatively higher interest rate and are
available only to borrowers having excellent credit. Sometimes a third party is
involved called the Mortgage Broker.
Loans are sometimes sold in the open market to larger investors byoriginating
mortgage company. There are some companies, called correspondent lenders who
sell all or most of their closed loans to these investors, by accepting some
risks for issuing . Some times they offer niche loans by higher prices which
the investor does not wish to originate.
A brief idea can be given with regards to the interest rates prevailing in the Mortgage market of USA.
The US mortgage banking BPO market in
India
The US mortgage banking BPO market in India is expected to
grow very fast. It approximately $ one billion over the next five years from
the existing $150 million.
The industry presently employs about 7,500 people in this
sector. Keeping in view the research report entitled "BPO
Opportunities in the US Residential Mortgage Market" by Trinity Business
Process Management and Avendus Advisors, the offshore addressable BPO market
size for the US residential mortgage ecosystem is in the range of $6 billion to
$7.4 billion.
According to Trinity's VP - sales and marketing, Francesco
Paola, the future growth of BPO will be driven by an increased focus on
domain-specific vertical processes that provide not only cost savings, but
other long-term benefits in the areas of productivity and capacity management
for the client.
Prevailing Interest Rates In The Mortgage Market of USA
A brief idea can be given with regards to the interest rates prevailing in the Mortgage market of USA.
USA
Mortgage Type
Tenure
Interest Rates %
Loan To Value Ratio
Max Tenure Of Loans
Fixed Rate Mortgage
15 Years
5.36
80%
30 Years
30 Years
6.05
Floating Rate Mortgage
1 Year
3.79
Mortgage GDP ratio in USA
The Mortgage GDP ratio in USA for
the year 2001 was at 54% in comparison to the 57% in UK, 40% in EU, 7 % in
China and 2.5% in India.
