Europe: Homegrown Mortgages are Sound

Lenders on the Continent tend to keep the risk in-house, so they're more careful about who borrows. Home buyers take on a lot less debt

For years, European bankers have endured slights from U.S. rivals about their stodgy lending habits. Imagine: They still demand a 20% downpayment—or more—for a home loan. Adjustable-rate mortgages are a novelty. And instead of packaging loans into fancy derivatives and selling them to hedge funds, the Europeans keep them on their own books. How quaint.

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