Alternative Forms of Housing Finance : What Can We Learn from Other Countries

This paper reviews the major characteristics and performance of a number of OECD country mortgage markets. The paper compares and contrasts the structure, principal features and performance of the primary and secondary markets with that of the US. The comparison includes the types of lenders and mortgage instruments in the primary market, institutions and instruments involved in the capital market funding of mortgages, how loans are funded and how major mortgage risks (default and prepayment) are managed. The paper compares and contrasts the role of government in mortgage market regulation, consumer protection and in the backing of institutions and instruments through guarantees and ownership in the primary and secondary market. The goal of the paper is to extract ideas about how the US system can be reformed to improve performance and restore private capital market finance