An International Perspective for Mortgage Market Reform

The United States and certain European countries (e.g., Ireland and Spain) have recently experienced serious distress in their residential mortgage markets. Public policy has responded with interventions to limit the deadweight costs of mortgage foreclosures, but with limited success. There are also open questions with respect to long-term reforms in mortgage market structures. In this paper, I make use of the important differences that exist between U.S. and European mortgage markets to help identify those aspects of residential mortgage markets that are most in need of reform.