International Comparison of Mortgage Product Offerings

Title: International Comparison of Mortgage Product Offerings

Date: 9/27/2010

Author(s): Dr. Michael Lea

Executive Summary:

The recently passed Dodd-Frank Financial Reform Bill has significant implications for the provision of mortgage credit in the United States. The bill stipulates the characteristics of qualified mortgages, which are likely to become the standard instruments in the market going forward. The bill bans or restricts the use of pre-payment penalties, balloon payments, interest-only payments and other features commonly offered in the mortgage choice set. A likely outcome of the bill is to perpetuate the use of the long-term fixed rate pre-payable mortgage (FRM) with implications for the future of the mortgage GSEs.