Thông tin tài liệu
Edited by
Loïc Chiquier and Michael Lea
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Housing Finance Policy
in Emerging Markets
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00-forematter.indd ii 6/16/09 8:40:45 PM
Housing Finance Policy
in Emerging Markets
Edited by
Loïc Chiquier
and Michael Lea
non-bank financial
institutions group
global capital markets
development department
financial and private sector
development vice presidency
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iv housing finance policy in emerging markets
© 2009 e International Bank for Reconstruction and Development/ e World Bank
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Washington, DC 20433
Telephone: 202-473-1000
Internet: www.worldbank.org
E-mail: feedback@worldbank.org
All rights reserved
First printing June 2009
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is volume is a product of the sta of the International Bank for Reconstruction and
Development/ e World Bank. e ndings, interpretations, and conclusions expressed
in this paper do not necessarily re ect the views of the Executive Directors of e World
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Library of Congress Cataloging-in-Publication data has been applied for.
ISBN: 978-0-8213-7750-5
eISBN: 978-0-8213-7751-2
DOI: 10.1596/978-0-8213-7750-5
Cover and publication design: James E. Quigley
Cover photo: Photos.com
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v
Contents
Foreword xix
Acknowledgments xxi
Abbreviations xxiii
Introduction xxix
Introduction xxix
Objectives xxix
Evolution of Housing Finance Systems xxxi
Policy Recommendations xxxiv
Impact and Lessons of the U.S. Subprime Crisis xxxvii
Housing Finance Is Interrelated with the Broader Economy xxxviii
Structure of the Book xxxix
Summary Conclusions xliv
chapter 1
Housing Finance and the Economy 1
Developed Economies 1
Emerging Economies 3
e Importance of Housing Finance 5
e Demand for Housing Finance 11
Macroeconomic Factors 11
Financial Liberalization 13
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vi housing finance policy in emerging markets
Technological Change 13
Concerns and Opportunities 14
e E ect of Mortgage Finance on Savings 14
e E ect of Mortgage Finance on Investment 15
Mortgage Finance and Growth 15
Housing Finance, Business Cycles, and Economic Fragility 17
Mortgage Finance and the Distribution of Risk 20
House Prices, Housing Finance, and Economic Activity 22
Lessons for Emerging Markets 24
chapter 2
Structure and Evolution of Housing Finance Systems 29
Mortgage Lending Models 30
Building Societies/Savings & Loans 30
Commercial Banks 33
Contract Saving Schemes 35
Specialist Mortgage Banks 36
Combining Di erent Systems 37
Secondary Mortgage Markets 39
Introducing New Lending Models: Mexico and India 40
Unbundling of Mortgage Value Chain 42
State-owned Lenders 46
Conclusions 47
chapter 3
Mortgage Instruments 49
Fixed-Rate Mortgages 50
Adjustable-Rate Mortgages 52
Indexed Mortgages 56
Interest-Only Mortgages 60
Reverse Mortgages 62
Lessons for Emerging Markets 63
chapter 4
Primary Mortgage Market Infrastructure 65
Appraisal 68
e Importance of Sound Appraisal 68
Developing an Appraisal Industry 69
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contents vii
International Standardization of Appraisal Methodology 69
Appraiser Quali cations, Appraisal Associations,
Independence, and Ethics 72
Quantitative Appraisal Models and Real Estate Data 73
e Challenges of Establishing an Appraisal Industry in
Emerging Markets 74
Mortgage-Related Insurance Products 76
Property Insurance 76
Mortgage Life Insurance 78
Catastrophic Insurance 80
Title Insurance 83
Credit Information Bureaus 85
e Importance of Credit Information in Mortgage Finance 85
Credit Bureaus in Developed Markets 86
Credit Bureaus in Emerging Markets 88
Membership 90
Ownership 91
Management and Development 91
Data 91
Consumer Protection 92
chapter 5
Enforcement of Mortgage Rights 93
Does Mortgage Collateral Matter? 95
Di erences between Legal Systems 97
Forms of Mortgage and Mortgage Documentation 100
Alternative Security Devices 100
e Land Charge 102
e Mortgage Certi cate 102
Mortgage Documentation 102
Secondary Mortgage Markets 103
Procedural Issues in Mortgage Enforcement 104
Non-judicial Enforcement 106
Negotiated versus Auction Sale 112
Responsibility for Sale 112
Auction Sale Prices 113
Creditor’s Right to Acquire the Mortgaged Property 113
Notice, Cure, Rights of Redemption, and Stays of Execution 114
Bankruptcy and Other Preferences 116
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viii housing finance policy in emerging markets
Appeals 116
Eviction 117
Distributions 118
Alternatives to Mortgage Enforcement 118
Forbearance 119
Alternatives to Mortgage Collateral 120
Common Property Mortgage 122
Minimizing Enforcement Actions 123
chapter 6
Consumer Information and Protection 125
De ning the Consumer 127
Developed Markets 127
Emerging Markets 127
Consumer Protection Objectives 128
Information Asymmetry between Lenders and Consumers 129
Consumer Heterogeneity 130
Transaction Cost Asymmetries during the Going Concern 131
Vulnerability of the Consumer to Market Risks 131
Protecting the Consumer through the Loan Life Cycle 133
Before Borrowing 133
e Loan O er and Closing 137
e Ongoing Concern 139
e Back End: Default 147
e Costs of Consumer Protection 150
Opportunity Costs of Regulation 150
Alternative Implementation Forms, Costs 151
Enforcement Costs 152
Is Consumer Protection a Luxury Good for Emerging Markets? 153
Emerging Markets Are Part of the Global Consumer
Protection Trend 153
Appropriate Regulations May Support FinancialSector
Development 153
Conclusions 156
chapter 7
Construction Finance in Emerging Economies 159
Real Estate Development Process and Risks 162
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[...]... 414 chapter 16 Housing Finance Subsidies 417 Where to Start? Linking Housing Problems to Subsidy Policy 420 Analyzing the Causes of the Housing Problems .420 Subsidies and Other Types of Government Intervention 426 Why Subsidize Housing? 428 Subsidies and the Expansion of Housing Finance Systems .429 Housing Finance Sector Problems, Causes, and Subsidies 429 Housing Finance Subsidies,... (approach) information technology International Union for Housing Finance International Valuation Standards Committee Jordan Mortgage Refinance Corporation National Housing Fund (Poland) Korea Housing and Commercial Bank Korea Housing Bank Kazakhstan Mortgage Guarantee Fund Latin America and the Caribbean low-income housing tax credit xxv xxvi housing finance policy in emerging markets lmi ltv mba mbs mdg... book continues by laying out some of the policy alternatives and models of housing finance (products, infrastructure, risk management, regulations, funding) In line with the priorities of many governments, the book is focused on solutions; in particular the role of government in contributing to the growth of housing finance and in increasing access to housing finance for lower and informal income households... of housing in terms of both quantity and quality The purpose of this book is to provide fact-based information and guidance to policy makers concerned with housing finance in emerging markets An overarching goal is to improve the understanding of the importance of housing finance to the economy This includes covering the prerequisites for an effective housing finance system together with the main characteristics... worked in many emerging economies Evolution of Housing Finance Systems Since 1993, the penetration of housing finance has increased dramatically in developed economies In the United States, in European countries, Australia, or Japan, residential mortgage markets represent between 50 and 100 percent of the gross domestic product (GDP) Housing finance has also been developing in more emerging markets, ... microfinance in housing remains limited, this activity can represent an important source of funding for those in the informal sector introduction In the last decade, a few far-reaching trends have been significant drivers for the expansion of housing finance in emerging economies These include the following: Favorable macro conditions, notably in terms of falling inflation and mortgage rates (both in. .. imf infonavit irb it iuhf ivsc jmrc kfm kh&cb khb kmgf lac lihtc government-sponsored enterprise House Building Finance Corporation Housing Development Board Housing Development Finance Corporation housing equity withdrawal Housing Finance Companies Hong Kong, China Mortgage Corporation Home Loan Guarantee Company (South Africa) Home Guaranty Corporation (Philippines) Housing Microfinance Housing Provident... funds, state-owned housing banks, and so forth) can be an important stimulant for housing finance The housing sector is too large for any government to finance it alone Liberalization is a universal trend that mobilizes savings from the public through banks and, in later stages of development, through xxxiii xxxiv housing finance policy in emerging markets capital markets, as long as housing loans can offer... developed and emerging markets, but the overall environment, in particular for housing and financial services, presents greater challenges These include less favorable financial and economic conditions; greater range and quantum risks to manage; limited fiscal space, which can constrain government policy; and, importantly, xxix xxx housing finance policy in emerging markets emerging markets, which... Opportunities for Housing Microfinance 404 Limited Potential for Linking HMF and Housing Subsidies 404 Linkages between Commercial Banks and Housing Microfinance .407 The Limitations of Housing Microfinance 409 Market Size 409 Pricing and Access .410 Refinancing and Other Microfinance Limitations 412 Potential to Contribute to Entrenchment of Informality .414 . xliv
chapter 1
Housing Finance and the Economy 1
Developed Economies 1
Emerging Economies 3
e Importance of Housing Finance 5
e Demand for Housing Finance. ect of Mortgage Finance on Savings 14
e E ect of Mortgage Finance on Investment 15
Mortgage Finance and Growth 15
Housing Finance, Business Cycles, and
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