Mortgage sector


If any of the links do not work and you are interested in the material, please e-mail me under

Note: this page lists published own work of the past 20 years, which covers a range of countries worldwide. There is additional unpublished consulting work of ca the same volume on more countries. For a comprehensive published resource base in housing finance, to which we sector specialists all contribute, please visit the website of my colleague Professor Marja Hoek-Smit at the Wharton School, Hofinet.

2014/15 I did intensive consulting work on creating a multi-seller covered bond facility and reformulating the covered bond law in Armenia, financed by the German finance ministry BMF and managed by KfW. Building new financial structure is just as important as tearing obsolete one down, even if you are more of a Mephistopheles character.

November 2015: Presentation held at the 3rd International Housing Finance Conference in Seoul/Korea on European mortgage consumer protection. I was asked to do a section on mortgage debt restructuring. In terms of principal reduction, the recent Hungarian case, which now Poland, Croatia and Cyprus try to mimick, excels. I am preparing a paper on the subject to be finished ca April 2016.

September 2014: NBP workshop Recent trends in the real estate market and its analysis, 2013 Papers submitted for publication are now published in the Narodowy Bank Polski Working Paper Series and will be indexed on IDEAS REPEC and SSRN.

August 2014 Contribution of a chapter to The Global Financial Crisis and Housing on Transatlantic Mortgage Boom and Bust. The book has been carefully edited by Susan Wachter, Man Cho and Moon Joong Tcha. Korean Development Institution Series in Policy and Development, Edward Elgar.

July 2014 Publication of a Finpolconsult study on mortgage prepayment indemnities in Europe (Vorfaelligkeitsentschaedigungen in Europa) as a follow-up on the implementation challenges of the EU CARRP Directive. The study has a broader discussion of the mortgage product menu and its stability implications as well as German mortgage market issues (in German, Anschreiben). German speakers might be interested in the survey on prepayment indemnities in Germany undertaken by the vzbv consumer group, of course always bearing in mind that it is a lobby group pushing its case (just like the banks). Die Welt has press coverage of my study and a piece produced by IW on the subject.  For english studies and material on the subject and European mortgage finance in general see the housing finance page on this website.

March 2014: publication of a study on Central/Eastern European mortgage and covered bond markets (Realkredit- und Pfandbriefmaerkte in Mittel- und Osteuropa) financed in 2012 by a German covered bond software provider (German). The study benefited from the earlier EBRD study available for download below. Covers also commercial real estate markets and additional countries.

February 2014 Paper for the National Bank of Poland on mortgage finance regulation in CEE summarizes my 2012 EBRD study.

June 2013: those of you who are interested in Spanish mortgage finance and the subsequent banking crisis may be interested in my ad-hoc presentation given at this years International Housing Finance Course at the Wharton School. I will try to do more in-depth work on the Spanish crisis, the problem as usual is politics pre-empting access to public funding.

November 2012: Presentation given at the SUERF Conference in Copenhagen on the transatlantic mortgage crisis.

October 2012: EBRD-funded study on Mortgage Regulation in Central and Eastern Europe with an empirical focus on Hungary, Romania, Croatia and Serbia. Here is the presentation held at a seminar in Budapest mid-October.

Economist quote on the risk of banking crisis amidsts Germany's emerging house price bubble. I have argued elsewhere that German housing market fundamentals are strong, but financial conditions have softened now so much - primarily due to 'Euro angst' as my old colleague at empirica, Rainer Braun, says correctly - that low implied yields become a serious stability risk in some prominent housing market corners. And let's not be fooled by stagnant prices elsewhere: where the turnover is, there is the risk. If this goes on, holding the bag could be once again taxpayers who implicitly guarantee our retail banks that so far - and this in the motherland of Pfandbriefe - refuse to issue long-term bonds to secure low financing cost that could match those low yields. And unfortunately, the Basle III 'Net Stable Funding Ratio' concept is supporting this risk amnesia by assuming that most deposits will roll without repricing risk. Good sleeps over there at the BIS.

October 2012: Why does Germany not take the Polish example and limit mortgage loan maturities to 25 years to stem her house price boom? Ad-hoc commentary (in German). This could be an important precautionary measure, even as German housing lending so far doesn't show much signs of a boom.

June 2012: Short Zerohedge post on some of the issues facing investors regarding the construction of the Spanish covered bond law. See also my earlier paper on the German Pfandbrief system (in Deutsch).

June 2012: Presentation given at IMFs MCM Department on Housing Finance Specialists - Reform or Unwind, as we are faced with dozens of dysfunctional housing finance systems in the overdeveloped world.

April 2012: Short article looking into German house price risk, potential mortgage default drivers and their joint financial determinants, written on behalf of Genopace (B2B platform). There are obviously mitigants, such as Germany's high rental sector share. Problematic however is the impact of low rates on house prices, and in combination with long-term fixing of those rates the high duration gap taken by German banks and accepted by bank regulators (Deutsch).

FT Alphaville post on below paper highlighting the challenge for central banks, courtesy Tracy Alloway.

March 2012: Paper on Transatlantic Mortgage Credit Boom and Bust – the Impact of Market Structure and Regulation sponsored by the Korean Development Institute KDI. In this piece I review how the increasingly risky setup of Western mortgage markets - where borrower and lender leverage as well as mismatches have increased over decades as a result of liberalization - has weakened the resilience against global credit booms. Short of returning to special banking I recommend a Volcker Rule for mortgage finance, which would minimize the cross-subsidization of credit through interest rate risk. The paper is part of a forthcoming KDI book publication on housing finance reform.

December 2011: Presentation given at the Korean Development Institute international conference on 'A New Paradigm for Housing Policy', Seoul Dec 12-13, on the transatlantic mortgage crisis.

November 2011: release of a January 2011 (in empirical substance early 2010) paper on the causes, consequences and ideas for the regulation of foreign currency mortgage lending in Central and Eastern Europe. We analyzed 4 countries in somewhat greater depth than usual: Poland, Hungary, Latvia and Ukraine. Our key point is that - in long-term mortgages - some countries cannot avoid doing FX lending, while others can and should. Those who can't should focus on developing material protections against downside risk for both borrowers and banks rather than doing stop and go with FX product bans.

September 2011: Comment on the U.S. interagency conflict that broke the monetary policy transmission channel for mortgages. Essentially, until the summer of 2011 Federal Reserve zero interest rate policies, sponsored by savers, have recapitalized the former Government-sponsored Enterprises Fannie Mae and Freddie Mac as well as U.S. banks holding mortgage bonds, rather than benefiting U.S. consumers. By the fall of 2001 a consensus seems to be emerging that - even as consumer debt levels remain way too high - at least lower policy rates should be passed  through directly to consumers, allowing for indirect positive feedback effects on the industry.

June 2011: Paper for CEPS Brussels regarding a new European Retail Mortgage Credit regime in consumer protection. The paper takes a transatlantic perspective of the retail mortgage sector crisis we are currently facing, an approach which was not possible to take under the EU DG Markt study below. The launch of the paper was on June 23 at CEPS, with EU parlamentarians Antolin Sanchez-Presedo (Spain), Vicky Ford (United Kingdom) and Sven Giegold (Germany) present and commenting. My brief presentation during the event is here.

March 2011: EU DG Markt launch of the Study on the Costs and Benefits of Different Policy Options for Mortgage Credit, co-authored by Finpolconsult/Achim Dübel with London Economics. The study already had been submitted by the authors in Fall 2009. DG Markt decided to publish it only together with her Proposal for a Directive on credit agreement related to residential property and the associated Impact Asssessment. Visit the DG Markt mortgage credit website.  The site has also our extensive legal baseline annex.

I have separated the section of the above study on Early Repayment, which is of potential interest for anybody looking into fixed-rate mortgage lending regulation regimes. Download here.

Jan 2011 Paper analyzing the excessive borrower leverage problem in U.S. mortgage finance and suggesting to address it (inter alia) via contract savings for housing (Bausparen)

October 2010 Presentation given on early repayment and mortgage product choice in the CEPS retail credit working group in Brussels

July 2010 Paper on crisis issues and reform needs of the Pfandbrief system that channels a substantial amount of German cross-border investments (Deutsch). Pfandbriefe are the German origin of covered bonds founded under Frederick the Great to rebuild war-torn Silesia.

May 2010 Paper on US covered bond law design considering the international perspective responding to draft legislation submitted by Congressman Garrett

May 2010 Presentation given with Simon Walley on regulation of foreign currency lending (cases in Central and Eastern Europe) at the 4th World Bank conference on housing finance in emerging markets

May 2009 Comment for the finance committee of the German parliament (Deutscher Bundestag) on the specific German causes of both the U.S. and the German financial crisis (Deutsch)

October 2008 Article for Europace Newsletter on interest rate risk exposure of German mortgage lenders (Deutsch)

July 2008 Policy paper for IFC on housing finance development impact in emerging markets

May 2008 World Bank conference presentation on Subprime crisis and mortgage consumer protection in emerging Markets

March 2008 Workshop on Contract Savings for Housing (Bausparen) regulation and subsidy policy held for IFC in Moscow

2007 Book publication on US mortgage lending standards and market crisis (ISBN 978-3-87169-545-2), Domus-Verlag, Berlin (Deutsch) 

October 2007 European Federation of Bausparkassen conference presentation on US mortgage market crisis and implications for transition countries, Prague

2007 Study with Mercer Oliver Wyman on mortgage distribution in Europe

August 2007 Presentation given at Europace conference on the developing US mortgage market crisis, Potsdam (Deutsch)

...with a little puzzle for German speakers

October 2007 Eurocatalyst 2007 conference award  for  content, Madrid

July 2007 Presentation given at Bruegel on EU Mortgage Market Integration, Brussels

2006 EU Mortgage Funding Expert Group, final report

2006 KfW Housing Finance in Emerging Markets, Chapter on Regulations (book publication 2008)

2006 EU-Tacis-funded paper on Mortgage Consumer Protection in Ukraine

2006 EU-Tacis funded overview over Mortgage Market Structures in selected CEE and developed markets, for Ukraine

2006 Policy paper on mortgage prepayment in Europe, for Verband deutscher Hypothekenbanken

2006 Long presentation on early repayment legal models and options costs in Europe

2005 Study with Mercer Oliver Wyman on risk and funding of mortgage lending in Europe, for Mortgage Insurance Trade Association

2005 Article on European mortgage market integration, for CEPS.2005 Study with London Economics on
Mortgage Credit Costs and Benefits, for DG Markt of the EU Commission

2005 Evaluation of Forum Group Recommendations on EU Mortgage Market Integration, personal comment (August 2005)

2003 Study with Mercer Oliver Wyman on the integration of European mortgage markets, for European Mortgage Federation

2003 Study on financial, fiscal and housing policy effects of contract savings for housing in the Czech Republic and Slovakia, for Financial Sector Development Department of the World Bank

2000 Technical and policy note on housing finance in Brazil - the legacy of the Sistema Financiera Habitacional, for Latin America and the Caribbean Office of the World Bank, with Baralides Alberdi

Plus a Y2K WB paper reviewing experiences of countries cutting back housing finance subsidies

1998 study for the German Ministry of Construction on mortgage foreclosure avoidance schemes for retail low-income housing finance in international comparison (Deutsch). I used the occasion for a Washington DC trip to convince FHA to introduce at least a minimal pre-foreclosure period into their handbook during which debt restructuring or own-to-rent conversions could be implemented. 

1997 empirica study on the transposition of the EU Consumer Credit Directive to mortgage lending, for DG Sanco of the EU Commission

1997 Mortgage Prepayment: An International Comparison, Paper presented at the American Urban Economics and Real Estate Association Conference, Berkeley with Michael Lea.

1995 Book publication on risk-based capital requirements and commercial mortgage credit risk, Fritz-Knapp Verlag Frankfurt link.