Because home ownership has been such an important

Info icon This preview shows pages 95–98. Sign up to view the full content.

View Full Document Right Arrow Icon
Because home ownership has been such an important goal in the U.S., one might argue that (at least some of) the trauma might have been worthwhile, because all of the subsidies and policies might have allowed the U.S. to have a far superior home ownership rate, as compared to that in other developed countries. As the data in Table 7-2 indicate, this is simply not the case. Other developed countries (Germany is the lone substantial outlier in the table) have been able to sustain comparable or even higher rates of home ownership, without the elaborate subsidies
Image of page 95

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
94 and policy apparatus that has characterized U.S. housing policy and mortgage finance policy. And to the extent that home ownership rates also are indicative of comparative house affordability, the same conclusion stands. Table 7-2: An International Comparison of Home Ownership Rates Rank Country Ownership Rate Date Source 1 Singapore 89% 2009 Statistics Singapore 2 Spain 85% 2008 European Mortgage Federation 3 Iceland 83% 2005 Statistics Iceland (HES survey) 4 Belgium 78% 2007 European Mortgage Federation 5 Norway 77% 2001 UN Economic Commission for Europe 6 Portugal 76% 2007 European Mortgage Federation 7 Luxembourg 75% 2008 European Mortgage Federation 8 Ireland 75% 2009 European Mortgage Federation 9 Chile 73% 2002 UN Housing Policy 10 Italy 72% 2007 INSEE and Eurostat 11 Israel 71% 2004 UN Economic Commission for Europe 12 Australia 70% 2006 Australian Bureau of Statistics 13 England 68% 2010 Building Societies Association 14 Canada 68% 2006 Statistics Canada 15 Sweden 68% 2008 European Mortgage Federation 16 New Zealand 68% 2001 Statistics New Zealand 17 United States 67% 2009 US Census Bureau 18 Japan 61% 2003 Japan Statistical Yearbook 2005 19 Finland 59% 2008 Statistics Finland 20 Czech Republic 59% 2007 European Mortgage Federation 21 France 57% 2007 European Mortgage Federation 22 Netherlands 57% 2008 European Mortgage Federation 23 Austria 56% 2009 Statistics Austria 24 Denmark 54% 2009 European Mortgage Federation 25 Germany 46% 2007 INSEE and Eurostat 26 Switzerland 35% 2000 Statistics Switzerland Source: Alex J. Pollock, Testimony before the Subcommittee on Security and International Trade and Finance, Committee on Banking, Housing and Urban Affairs, U.S. Senate, September 29, 2010 7.1.5 Bankruptcy Legislation Relating to Mortgage Defaults In the U.S., many states legislate that a mortgage lender has no recourse to any other assets besides the house when a borrower defaults on her mortgage. 50 In other U.S. states, there is recourse, but only through a complicated and lengthy court process that banks in practice often forgo. In sharp contrast, many countries in Continental Europe have unlimited recourse: not only to all of the other assets of the delinquent borrower, but also to her future wages. Research has shown – and it is common wisdom – that countries with stronger recourse upon
Image of page 96
95 default experience fewer mortgage foreclosures. Put simply, homeowners in Belgium do not default on their mortgages because lenders will come after everything that they own plus all future wages until the debt is fully repaid. Such recourse also makes it easier to repossess the house if necessary (it is faster and less costly). For example, Denmark’s legal system with
Image of page 97

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 98
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern