Responding to the Housing and Financial Crises: Mortgage Lending, Mortgage Products and Government Policies

Abstract

The long period of house price growth in markets across the world ended with the US and global financial crisis of 2007/08. The crisis and the consequent recession had profound effects on mortgage market actors -including households, institutions and governments -in most advanced economies, whether or not they participated in this rapid house price growth. Many of the trends observed during the boom, especially the innovations in financial instruments, were reversed. This paper presents evidence on how mortgage markets and stakeholders responded in the initial period after the crash. In particular it reports on a 2009 survey of housing experts from 16 industrialised countries, which concentrated on how each country's mortgage system responded to the crisis and how governments addressed the problems of borrowers.

Partnership patterns and homeownership: a cross-country comparison of Germany, the Netherlands and the United Kingdom

“…Indeed, whilst Germany's comparably stringent mortgage criteria (e.g. high mortgage down payments, rigorous current income requirements, longterm fixed interest rates and early repayment penalties) and widely available low-cost and high-quality rental alternatives are considered critical (Kurz, 2004;Mulder & Wagner, 1998;Scanlon & Whitehead, 2004;Voigtländer, 2009), this additional factor may also underpin the particularly low homeownership rates observed in the younger German cohorts.…”

Household vulnerability in rural areas: Results of an index applied during a housing crash, economic crisis and under austerity conditions

“…Aalbers, 2009;Peck et al, 2009) and the impacts of the housing and financial crisis on national economies (e.g. Kim and Renaud, 2009;Scanlon et al, 2011), there is currently a dearth of literature examining the actual impacts of the recession on household spaces or the everyday lived experience within the economic crisis. In this paper we address this significant gap by exploring rural household vulnerability within the context of the global financial crisis and the roll-out of austerity policy measures.…”

Home ownership under changing labour and housing market conditions: tenure preferences and outcomes among freelancers and flex workers

“…To a great extent this applied to the Netherlands, but large-scale subprime lending never occurred. Since 2008 conditions have become more stringent for all loans (Scanlon et al, 2011). There is little solid evidence that Dutch mortgage lenders have put additional restrictions on loans to flexworkers and freelancers, but some qualitative research shows that it has become harder for both freelancers and those on flexibletemporary employment contracts (Companen, 2012).…”

“…In the Netherlands, banks set somewhat stricter criteria for flexworkers, but proof of a good past performance with regard to income stability will lift the largest barriers. There is some consensus that both leverage and loan conditions in Western mortgage markets were relaxed from the mid-1990s until 2008 (Scanlon, Lunde, & Whitehead, 2011) and in some countries even led to subprime practices. To a great extent this applied to the Netherlands, but large-scale subprime lending never occurred.…”