Mortgage Backed Securitization: When Does It Work‪?‬

INTRODUCTION One of the perplexing problems for all nations is the housing of its people. The development of sophisticated public housing schemes is costly and involves significant public resources. The success of mortgage backed securitization in the US as a generator of housing finance is unquestioned. Commentators observe that since the mid-1980s, the techniques of securitization had begun to be introduced into an increasing number of national markets, including Australia. However, securitization has remained largely of marginal significance outside the US, and more recently, Australia. Why is this the case? While this question may be answered empirically in some years hence, a comparison of securitization in the US and Australia may shed some light on the answer.