Responding to the housing and financial crises: mortgage lending, mortgage products and government policies

The long period of house price growth in markets across the world ended with the US and global financial crisis of 2007/08. The crisis and the consequent recession had profound effects on mortgage market actors – including households, institutions and governments – in most advanced economies, whether or not they participated in this rapid house price growth. Many of the trends observed during the boom, especially the innovations in financial instruments, were reversed. This paper presents evidence on how mortgage markets and stakeholders responded in the initial period after the crash. In particular it reports on a 2009 survey of housing experts from 16 industrialised countries, which concentrated on how each country's mortgage system responded to the crisis and how governments addressed the problems of borrowers.