Buckley, RobertKaraguishiyeva, GulmiraVan Order, RobertVecvagare, Laura2014-05-052014-05-052003-05https://hdl.handle.net/10986/18180Buckley, Karaguishiyeva,Van Order, and Vecvagare analyze the structure of approaches to mortgage credit risk that are now being used in a number of OECD and transition economies. The authors' basic approach is to show how option pricing models can help measure and evaluate the risks of various schemes. They find that mortgage default insurance can be a cost-effective tool for both improving housing affordability and efficiently addressing some of the rationing that characterizes this market. When correctly structured, as it is in a number of transition and market countries, this kind of program can be expected to reduce nonprice rationing at an actuarially fair price. At the same time, considerable care must be exercised in the development of such instruments. Geographical risk diversification, particularly across borders, can play a major role in the success of these programs. Such diversification could be important not only in smaller transition economies but in EU countries as well.en-USCC BY 3.0 IGOASSET PRICESASYMMETRIC INFORMATIONBANKRUPTCYBAUSPARKASSENBONDSCAPITAL REQUIREMENTSCOMPARATIVE ADVANTAGECONTINGENT LIABILITIESCONTINGENT LIABILITYCOVERAGECREDIT INSURANCECREDIT POLICIESCREDIT RATINGCREDIT RATIONINGCREDIT RISKCREDIT RISKSDEBTDEBT FINANCINGDEFAULT RISKDEPOSIT INSURANCEDIVIDENDSDOWN PAYMENTSEMPIRICAL EVIDENCEFACE VALUEFINANCIAL INSTITUTIONSFINANCIAL SECTORFINANCIAL SYSTEMSGOVERNMENT EXPENDITURESHOMEOWNERSHIPHOUSEHOLD INCOMEHOUSINGHOUSING AFFORDABILITYHOUSING MARKETSINFORMATION PROBLEMSINSURANCEINSURANCE COMPANIESINSURERSLAWSLEVEL PLAYING FIELDMARKET ECONOMIESMARKET INSTITUTIONSMATURITIESMORTGAGEMORTGAGE CREDITMORTGAGE CREDIT INSURANCEMORTGAGE DEFAULTMORTGAGE DEFAULT INSURANCEMORTGAGE INSURANCEMORTGAGE INSURERSMORTGAGE LENDINGMORTGAGE LOANMORTGAGE LOANSMORTGAGE MARKETMORTGAGE MARKETSMORTGAGESNEGATIVE EQUITYPOLICY RESEARCHPREMIUMSPRESENT VALUEPRICE RATIONINGPRICING MODELSPRIVATE INSURANCEPROGRAMSPUBLIC INSURANCEPUBLIC POLICYRATESRESERVESRISK ALLOCATIONRISK DIVERSIFICATIONSAVINGSSAVINGS BANKSTRANSITION ECONOMIESTRANSPORTURBAN DEVELOPMENT MORTGAGESCREDIT TRANSACTIONSLOANSLENDINGPUBLIC POLICYGUARANTEESMETHODOLOGYPREMIUMSHOUSEHOLDSTRANSACTION COSTSPUBLIC POLICYSUBSIDIESURBAN DEVELOPMENThttps://doi.org/10.1596/1813-9450-3047