Mortgage Credit Systems Group 6Word格式文档下载.docx

Mortgage Credit Systems Group 6Word格式文档下载.docx

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RikkeBergHenriksen

OlavNicolaiKjæ

rnes

DavaajargalZogsoo

SonataJuknaite

MingyuSun

JakobHü

nermundErichsen

Supervisors

GitteTopJensen

JesperThorlundNielsen

Tableofcontents

1.IntroductionP.3,4

2.Methodology（Whydidwechoosethis）P.4

3.TheMortgagecreditsystemingeneral.

3.1.TheDanishMortgagecreditsystem.P.5-7

3.2.TheSpanishMortgagecreditsystemP.7-9

4.AnalysisP.9-12

5.ConclusionP.12

6.ListofliteratureP.13

7.ReflectionP.14

8.AppendixP.15

Introduction

ThisreportwillfocusonDanishandSpanishmortgagesystem,andonthefinancialcrisisinSpain.Thereportwillgiveageneralpresentationoftherespectivesystemsbeforeitwillanswerourresearchquestion.Ourresearchquestionisdividedintwoparts;

-“CantheDanishmortgagecreditsystembeappliedinSpain,andhow?

”

-“CouldtheSpanishfinancialcrisisbeenavoidediftheDanishsystemhadbeenapplied?

ThepresentrelevanceofthefinancialcrisisinSpain,andthefactthattwowesterncountrieshaveperformedsodifferentlythelastyearswasthefactorsthatledustoaskthementionedresearchquestions.

TheDanishmortgagecreditsystemiswellknowninthefinancialsectoraroundtheworld,foritsstabilityandsafehousefinancingmarket.IMF（InternationalMonetaryFund）statedinatechnicalnoteof2007that“TheDanishmortgagesystemisamongthemostsophisticatedhousingfinancemarketsintheworldandpresentssomeuniquecharacteristics”.

ThestableDanishmortgagesystemwasoneofthereasonfortheDanisheconomystayingasstableasitdidthroughthefinancialcrisis.TheSpanishmortgagesystem,ontheotherhand,wasoneofthemaincontributorstothefinancialcrisisSpainisfacingnow.

AnintroductiontotheSpanishfinancialcrisis.

AftertheupturnSpainhadexperiencedfinanciallyinthelastpartofthe90’sandthebeginningofthe00’s,agreaterpartoftheirpopulationhadtakenout,ortookoutmortgagestoeitherbecomehomeownersortoinvestintheboominghousingsector.

TheSpanishbuildingprocessislongandslow,withanaverageof2yearsbetweenbuildingpermitandcompletion.Whentheinternationalfinancialcrisishitin2007,Spanishconstructioncompaniessawademiseofinvestors,andbuildingprojectscametoahalt.ThisledtotheworstriseinunemploymenteverrecordedinSpain.

Theeconomicupswingintheyearspriortothecrisishadputsomeregionsonthebrinkoffullemployment.However,inbetweenOctober2007andOctober2008,Spain’sunemploymentraterosewithastaggering37%.Withmorethan4,000,000peopleunemployed,ofwhich2,000,000losingtheirjobwithinthelast12months,thecrisiswasareality.

Therapidriseinunemploymenthaditsdomino-effectonthemortgageinstitutions.AftertheSpanishgovernmenthadencouragedhomeownershipinthe60’sand70’s,atrendthatcontinuestoday,homeownershipinSpainisatastaggering80%.TheSpanishpopulationhasincreasedwithapprox.10millionthelast10years.Atthesametime,thehousepricesboomedamassive150%since1998.Thisledtomortgageinstitutionsissuing40and50yearmortgages,justtomakehomeownershippossibleforfirsttimebuyers.Agreatpartofthefirsttimebuyerswereyoungpeoplefromthebabyboomgeneration.Witha37%unemploymentrateinthisdemographicledtomoreandmoremortgagesnotbeingmaintained,whichsubsequentlyledtothefinancialcrisis.

Methodology

Theaimofthereport

Inthereport,wewanttoanalyzethemortgagesysteminDenmarkandSpain.ComparedwithSpain,theimpactofthefinancialcrisisinDenmarkisminor.Denmarkbenefitsfromitsowncomprehensiveandwellformedmortgagesystem.WechoseSpainbecausewewantedtofindoutwhySpainendedupinsuchcrisisandDenmarkdidn’tandifthesetwomortgagesystemsaretotallydifferentfromeachotherornot.WewillworktowardssolvingourProblemstatement“canDanishmortgageandcreditsystembeappliedinSpain,andhow?

”Bysolvingthisquestionwecangetadeeperunderstandingofthecomplexsystemsthatregulatesthemortgagesystemsinthesewesternnations. 

Informationanddata-collection

Wecollecttheinformationthroughseveraldifferentreliablesources.Thelawtextsofthetwocountriesgiveustheclearpictureofhowthelawcontrolsthewholesystemandithashighcredibility.Wetookacriticalapproachtothesourcesweusedwhilewritingthisreport,toensureanobjectivepointofview.OursourcesaremainlyfromtheInternet,wehavethereforetakenintoconsiderationthatthesourcescanbeuser-edited.Duringourdata-collectionwefoundsomereportsmadebycompaniesandfinancialadvisersinDenmarkandinSpain.Thesesourcesareobviouslysubjective,whichwehavetakenintoaccountwhenweusedthem.Tosubstantiatetheinformationgiveninthereportsweuseotherweb-pages,toensuretheinformationiscorrect.

AnexplanationoftheDanishmortgagecreditsystemandrelevantlawtexts

AmortgageloaninDenmarkisapledgeagainstapropertythatisheldbyabankeroralender.Whenobtainingahousemortgage,thedebtorborrowsmoneyagainstthemarketvalueofthehouse.Itisagreedthatthedebtorpaysbacktheloan,plusintereststothemortgageprovider.Theloanisfoundedintheissuanceofbonds.Thesebondsaresoldinthemarkettoinvestors,atacertaininterestrate.

TheinterestratesonthebondsaregenerallydecidedfromtheinterestrateECB.IfECBchoosetolowertheinterestrate,thentheDanishinterestrateareexpectedtofollow,becausetheDanishbondsareperfectsubstitutesforEuropeanbonds.

Whenobtainedamortgageinahouse,thennewownerhaveequityinourhouse.Equityisanassetthatwecanuseasacollateralforasecondmortgage,e.g.ifthehouseownerwanttoborrowalargesumofmoney,itcouldbeforrenovationofthehouse.Afterwardsthetwopartiesmustsignamortgagedeed,thatwillbesendtothelandregistrytoberegistered,aftertheregistrationitwillbeannouncedintheDanishofficialgazette.InDanishlawitisstated,thatallpropertiesmustberegisteredattheDanishLandregistry.Itisaswellstatedthatownershipandmortgagedetailshavetoberegisteredbeforeanypropertydealingswiththirdpartyarepermittedtohappen,accordingtoTheRegistrationofPropertyAct. 

InDenmarkthereturntimeisknownasduration.Ashortdurationmeansthatthedebtorhastopaybackmoreinashorterperiod,themonthlyyieldishigherthanifitisalongdurationwheretheyieldisnormaldistributed.Longdurationmeansthatdebtorwillspreadthecostofthemortgageoveralongerperiodoftime;

itcouldbe15,20or30years.ForDanishloanersitismostnormaltohavealongdurationthereoftenspansover30years.

Longdurationofabondisatypeofriskconcept.Whenhavingalongdurationittendstobemorerisky,butitisalsocheaperifitiscomparedwithbondsthathaveashortduration.

HereisanoverviewoftheDanishpaymentprofiles

∙Annuityloan,whichisaconstantpaymentduringthetotallifetimeofthemortgageloan.ThisisatypicalpaymentprofileofDanishmortgagebonds.

∙Serialloan,thisisafixedinstallmentpayment,duringthetotallifetimeofthemortgageloan.

StandingLoan,heretherearenoinstallmentpaymentsduringthelifetimeofthemortgage,thefullprincipalispaidbackattheenddateoftheloan,andthisisatypicalpaymentprofileforDanishgovernmentbonds.

Danishmortgagecreditinstitutionsarebylawpreventedfromundertakinganysubstantialcurrency,liquidityorinterestraterisk.InDenmarkthemortgagecreditinstitutionsarerequiredtomaintainacapitalsufficiency.Theratiohastobeataminimumof8%oftheirrisk-weightedassets,whichmeansthattheyarelimitedtohowmuchtheycanlend.Theyhavetohaveaminimumintheirtreasurechest,sotheydonotfallintobankruptcy. 

InDenmarkallmortgagecreditinstitutionsaresupervisedbytheDanishFinancialSupervisoryAuthority,whichmakessurethattheinstitutionsfollowtheDanishregulationandlaws.

WhyistheDanishmortgagecreditsystemsostable?

ThereasonwhytheDanishmortgagecreditsystemissostableisdueto“Thebalanceprinciple”.

TheIMFsummeduptheDanishbalanceprincipleinthefollowingway:

“Thebalanceprincipleimposesstrictmatchingrulesbetweentheassets（e.g.,mortgageloans）andtheliabilities（e.g.,mortgagebonds）ofmortgagecreditinstitutions.Eachnewloanisinprinciplefundedbytheissuanceofnewmortgagebondsofequalsizeandidenticalcashflowandmaturitycharacteristics.Theproceedsfromthesaleofthebondsarepassedtotheborrowerandsimilarly,interestandprincipalpaymentsarepasseddirectlytoinvestorsholdingmortgagebonds（Figure1）”.

Figure1.TheBalancePrinciple

InDenmarkthemortgageownerscanborrowupto80%oftheproperty’svalue,ifitishomeownership,therepaymentwillstretchoveratermof10to30years.Theremaining20%willbeborrowedinabank;

itwilloftenbeinabankthathasanarrangementwiththemortgagecreditinstitution.ItisaverybalancedmortgagecreditsystemwehaveinDenmark;

about95%oftheDanishmortgagesarefundedbybonds.Thesebondsareissuedonthecapitalmarket.Inthismarkettherearebothfixedrateandvariableratemortgagesaccessible.Therateislinkedwiththepriceofthebonds,whenthepriceofbondsdecrease,thentheinterestraterisesandthemortgagegetsmoreexpensiveandviceversa.

AnexplanationoftheS