COURSE NUMBER: MBA 283.1

This course is cross-listed with the EWMBA Program

COURSE TITLE: Real Estate Finance and Securitization

UNITS OF CREDIT: 3 Units

INSTRUCTOR: Nancy Wallace

E-MAIL ADDRESS: wallace@haas.berkeley.edu

CLASS WEB PAGE LOCATION (HTTP URL):

MEETING DAY(S)/TIME: Mondays, 6:00 p.m.-9:30 p.m.

PREREQUISITE(S): MBA 203, MBA 280

CLASS FORMAT: Lectures and cases.

REQUIRED READINGS: Reader, Textbook

BASIS FOR FINAL GRADE: Midterm, homework sets, Final, class project.

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:
This course considers the operation of the U.S. mortgage and structured finance markets. The course applies basic tools of finance to the evaluation of mortgage, lease, and asset-backed contracts, the pricing of these contracts, and strategies to securitize both debt and real estate equity. The course exposes students to cases about current "real-world" real estate debt and equity deals and provides hands-on experience using modern option pricing tools for evaluating mortgage debt and equity-based securities.

Basic principles of economics and finance will be used to motivate the analysis tools surveyed in this course. The course begins with an overview of the structure of mortgage contracts and reviews the financial mathematics of mortgages including the calculation of various types of duration and convexity. These principles will be applied in the first major topic of the course: risk sharing in mortgage finance and leasing. In the second, part of the course we will consider mortgage and lease pricing including methods to price the options embedded in these contracts. The final section of the course will consider mortgage and asset-backed securitization, bond structures, and pricing.

BIOGRAPHICAL SKETCH:

Nancy Wallace is a Full Professor of Real Estate at the Haas School of Business, the University of California, Berkeley. She is Chair of the Real Estate Group and is Co-Chair of the Fisher Center for Real Estate and Urban Economics. She teaches asset-backed securitization, real estate investment analysis, real estate strategy, and real estate finance at Haas. Her research focus includes models of residential house price dynamics, mortgage contract design and pricing, mortgage backed security pricing and hedging, lease contract design and pricing, and executive compensation. She serves as a visiting scholar at the San Francisco Federal Reserve Bank and the Université de Cergy Pointoise, Centre de Recherche THEMA (Théorie Economique, Modélisation, et Applications). Professor Wallace is the President of the American Real Estate and Urban Economics Association and is a member of its Board of Directors. She is also a member of the editorial boards of Journal of Computational Finance and Real Estate Economics.