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Real Estate and Mortgage Economics and Investments


Underwriters should have a solid understanding of the macro-economic factors that affect the housing and mortgage markets in order to more fully assess how trends in these marketplaces may affect their borrowers (e.g. employment situation), the value of property securing the loan, and mortgage interest rates and products. Knowledge of financial planning and budgeting will also assist loan adjudicators with assessing a borrower’s plans and ability to meet his/her mortgage obligations, and to determine the most suitable mortgage product/terms for the borrower’s specific needs.

Underwriters should also be informed of the various sources of mortgage funds, including financing available from Mortgage Investment Corporations and syndicated mortgages, and the role of mortgage investment products in raising funds.

Course Outline

Section 1: Real Estate and Mortgage Market Economics
  • The economic importance of the real estate sector
  • Factors that affect the demand and supply of housing
  • Characteristics of real estate markets
  • Considerations in establishing interest rates
  • Characteristics of mortgage loans as investments
  • Overview of mortgage market trends
Section 2: Financial Planning and Budgeting
  • Household financial planning and budgeting
  • Mortgage borrower qualification
  • Types of mortgages
  • Adjustments to financial terms
  • Insurance considerations
  • Prepayment clauses and costs
  • Factors that impact credit reports
Section 3: Mortgage and Real Estate Investment Products
  • Bonds and securitization of mortgages
  • Mortgage investment corporations (MICs)
  • Syndicated mortgages
  • Real estate investment trusts (REITs)