A semi-Markov multiple state model for reverse mortgage terminations

Document description

Reverse mortgages provide a way for seniors to release the equity that has been built up in their home to supplement their post-retirement income. The value of a reverse mortgage loan is heavily dependent on the maturity or termination date, which is uncertain. In this research, the author models reverse mortgage terminations using a semi-Markov multiple state model, which incorporates three different modes of termination: death, entrance into a long-term care facility, and voluntary prepayment.