Home Mortgage Loan Defaults In the US and EU

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Presentation transcript:

Home Mortgage Loan Defaults In the US and EU Nina Segre 24 June 2010 ERES Conference

Several factors contributed to the mortgage crisis in the US Subprime loans & relaxed lending standards

Several factors contributed to the mortgage crisis in the US Subprime loans & relaxed lending standards Housing bubble burst

Several factors contributed to the mortgage crisis in the US Subprime loans & relaxed lending standards Housing bubble burst Secondary market forces/derivatives

Several factors contributed to the mortgage crisis in the US Subprime loans & relaxed lending standards Housing bubble burst Secondary market forces/derivatives Recession effects

EU responses have been more supportive to consumers than US responses DE: A foreclosed homeowner can rent back

EU responses have been more supportive to consumers than US responses DE: A foreclosed homeowner can rent back UK: FSA regulations Lenders must provide balanced info to borrowers Foreclosure is viewed as “last resort” Disputes resolved in special forum

EU responses have been more supportive to consumers than US responses DE: A foreclosed homeowner can rent back UK: FSA regulations Lenders must provide balanced info to borrowers Foreclosure is viewed as “last resort” Disputes resolved in special forum EU: Payment flexibility

Reforms are needed in the US Borrower equity in home should be required

Reforms are needed in the US Borrower equity in home should be required Regulation of lenders is needed

Reforms are needed in the US Borrower equity in home should be required Regulation of lenders is needed Secondary market reforms

Home Mortgage Loan Defaults In the US and EU

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