2004年-世界发展银行全球_Mortgage_Securities_in_Emerging_Markets_43页_362kb

Mortgage Securities in Emerging Markets Summary

Core Content

This paper explores the role and challenges of introducing mortgage securities in emerging markets. It highlights the importance of these financial instruments in improving housing affordability, increasing access to long-term funding, and better managing the risks associated with housing finance. The authors argue that while mortgage securities have a long history in developed economies, their adoption in emerging markets has been limited due to various structural and institutional barriers.

Main Viewpoints

• Housing Finance Challenges in Emerging Markets: Housing finance in emerging economies is often underdeveloped, with limited access, high costs, and significant risks for lenders.
• Potential of Capital Markets: Capital markets, particularly through mortgage-related securities, offer an attractive and potentially large source of long-term funding for housing. These instruments can help mobilize domestic savings and develop fixed-income markets.
• Mixed Experience: Despite the appeal, the experience of introducing mortgage securities in emerging markets has been mixed, with limited scale of success.
• Government's Role: Governments can play a supportive role in developing mortgage securities, but their involvement should be limited to facilitation and not to direct control. They should focus on creating a robust legal and regulatory environment.
• Risk Management: Mortgage securities can help reduce liquidity and interest rate risks for lenders, and provide institutional investors with a way to manage long-term liabilities.

Key Information

Types of Mortgage Securities

1. Whole Loan Sales: Involves the sale of mortgages to other lenders or investors, either individually or in pools.
2. Agency Bonds: Bonds issued by specialized mortgage agencies, often backed by mortgages.
3. Mortgage Bonds: Bonds issued against a mortgage collateral pool, with priority claims in case of issuer bankruptcy.
4. Mortgage Pass-through Securities (PTs): Securities that pass cash flows from mortgages to investors, with credit enhancement and no direct liability to the issuer.
5. Mortgage Pay-through Securities: Multiple securities issued against a single collateral pool, often used to modify cash flows for investors.

Importance of Mortgage Securities

• Improve Housing Affordability: By reducing the cost of mortgage finance and increasing access to funds.
• Enhance Liquidity: Capital markets provide liquidity that is not typically available through traditional banking systems.
• Increase Competition: Encourages the development of specialized mortgage lenders and reduces spreads.
• Support Long-Term Funding: Helps lenders manage long-term liabilities and offers institutional investors a way to match their long-term needs with mortgage assets.

Pre-requisites for Issuing Mortgage Securities

1. Market Need: Demonstrable demand for capital market funding and investor interest in mortgage-related securities.
2. Legal and Regulatory Framework: Adequate legal infrastructure for securitization, including lien registration, enforceability, and transfer of security interest.
3. Standardization: Standardized mortgage instruments, documents, and underwriting practices to reduce transaction costs and enhance liquidity.
4. Professional Servicing: Reliable and efficient servicing of mortgage loans to ensure investor confidence.
5. Property Appraisal Standards: Professional standards to ensure the value of collateral is accurately assessed.

Government's Role

• Facilitator: Governments should remove legal and regulatory barriers to mortgage securities and support the development of a legal framework that ensures collateral security.
• Avoid Distortions: Should avoid creating contingent liabilities or distorting market mechanisms through excessive support.
• Institutional Support: Can create entities similar to government-sponsored enterprises (GSEs) in the US, but with caution to ensure they do not lead to systemic risks.
• Sunset Clauses: Should consider sunset clauses to limit the duration of government support and ensure market-driven development.

Conclusion

While the development of mortgage securities in emerging markets is still in its early stages, the authors believe their use will grow over time as housing demand increases, lenders become more capital and liquidity constrained, and investors become more familiar with the risks. The success of mortgage securities depends on a strong legal and regulatory environment, a developed primary mortgage market, and a clear understanding of the role government should play in facilitating their introduction.