Mortgage Securities in Emerging Markets

Despite its recognized economic and social importance, housing finance often remains underdeveloped in emerging economies. Residential lending remains small, poorly accessible, and depository-based. Lenders remain vulnerable to significant credit, liquidity, and interest rate risks. As a result, housing finance is relatively expensive and often rationed. The importance of developing robust systems of housing finance is paramount as emerging economy governments struggle to cope with population growth, rapid urbanization, and rising expectations from a growing middle class. The capital markets in many economies can provide an attractive and potentially large source of long-term funding for housing, and solutions to better allocate part of the risks. The advent of institutional investors is creating large and rapidly growing pools of funds that may facilitate the development of mortgage-related securities. Despite such a strong appeal, there are significant barriers to the development of mortgage securities in emerging markets. Their success is dependent on many factors, starting with a strong legal and regulatory framework and liberalized financial sector, and including a developed primary mortgage market. The experience in developing mortgage securities in emerging markets has been mixed. The authors review the experience of introducing mortgage securities in emerging markets and explore the policy issues related to this theme.

Bibliographic Details

Main Authors:	Chiquier, Loïc, Hassler, Olivier, Lea, Michael
Language:	English en_US
Published:	World Bank, Washington, D.C. 2004-08
Subjects:	ACCOUNTING, ACCOUNTING FRAMEWORK, ADEQUATE DISCLOSURE, ASSET SALE, ASSETS, BANK LOANS, BANKING SYSTEM, BANKING SYSTEMS, BANKRUPTCY, BANKRUPTCY REMOTENESS, BONDS, BROKERS, CAPITAL ADEQUACY, CAPITAL BASE, CAPITAL MARKET, CAPITAL MARKETS, CAPITAL RELIEF, CASH FLOW, CASH FLOWS, CENTRAL BANKS, COLLATERALIZATION, COLLATERALIZED MORTGAGE OBLIGATIONS, CONTRACTUAL SAVINGS, CORPORATE BONDS, CREDIT ENHANCEMENT, CREDIT QUALITY, CREDIT RISK, DEBT, DEPOSIT INSURANCE, DEPOSITS, ECONOMIC STABILITY, EMERGING MARKETS, EQUITY CAPITAL, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL SYSTEMS, FIXED RATE MORTGAGES, FORECLOSURE, GLOBAL MARKETS, GOVERNMENT INTERVENTION, HOUSING, HOUSING AFFORDABILITY, HOUSING CONSTRUCTION, HOUSING DEMAND, HOUSING FINANCE, HOUSING FINANCE SYSTEM, HOUSING FINANCE SYSTEMS, HOUSING LOANS, INSURANCE, INSURANCE COMPANIES, INSURERS, INVESTMENT BANKING, LAWS, LEGAL PROTECTION, LEGAL PROVISIONS, LENDING INSTITUTIONS, LEVEL PLAYING FIELD, LIABILITY, LIENS, LIQUIDATION, LIQUIDITY, LONG TERM LIABILITIES, MARKET ENTRY, MARKET RISKS, MBS, MORAL HAZARD, MORTGAGE, MORTGAGE BOND, MORTGAGE BONDS, MORTGAGE CREDIT, MORTGAGE FINANCE, MORTGAGE INVESTMENTS, MORTGAGE LENDING, MORTGAGE LOANS, MORTGAGE MARKET, MORTGAGE POOL, MORTGAGE PRINCIPAL, MORTGAGE SECURITIES, MORTGAGE-BACKED SECURITIES, MORTGAGES, OFF BALANCE SHEET, OPERATING COSTS, PENSION FUNDS, PORTFOLIOS, PREPAYMENT RISK, PRIMARY MORTGAGE MARKETS, RATING AGENCIES, REGULATORY FRAMEWORK, RESIDENTIAL MORTGAGES, RISK MANAGEMENT, SAVINGS, SECONDARY MORTGAGE MARKETS, SECURITIZATION, SECURITY DESIGN, SHORT TERM BORROWING, SYSTEMIC RISK, TRANSACTION COSTS, UNDERWRITING, URBANIZATION, VARIABLE RATE MORTGAGES ACCOUNTABILITY, ADVERSE SELECTION, ASSET ALLOCATION, AUTONOMY, BENEFICIAL INTEREST, BID, BOND, BOND ISSUANCE, BORROWING, CAPITAL ALLOCATION, CASH FLOW RISK, COLLATERAL, CONSUMER LOANS, DEALERS, DEPOSITORY, DEPOSITORY INSTITUTIONS, DISCLOSURE, EXPOSURE, FINANCIAL MARKET, MORTGAGE INSURANCE, MORTGAGE MARKETS, RISK, ISSUERS,
Online Access:	http://documents.worldbank.org/curated/en/2004/08/5066104/mortgage-securities-emerging-markets https://hdl.handle.net/10986/14159
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