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

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

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

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

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

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

7. 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

8. 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

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

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

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

12. Home Mortgage Loan Defaults In the US and EU