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Because home ownership has been such an important

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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
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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
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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
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