Danish Housing Bubble Leads Industry to Look to German Model
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Denmark’s home-loan industry, the world’s biggest issuer of mortgage-backed covered bonds, is looking to Germany to avoid a repeat of the housing bubble that sent Scandinavia’s weakest economy to the brink of a recession.
Realkredit Danmark A/S, Denmark’s second-largest mortgage lender, wants the $495 billion industry to reject loan applications if house prices exceed what German banks call the mortgage lending value, which strips out temporary price fluctuations to arrive at a long-term valuation.