the mortgage industry of denmark has proved very effective in providing borrowers with flexible and transparent loans on conditions close to the funding conditions of capital market players. simultaneously, the covered mortgage bondshousing finance in the global financial market, cgfs publications no 26, january 2006; box 3 transfer market risk from the issuing mortgage bank to bond investors. lastly, strict property appraisal rules, credit risk management by the mortgage banks, and tight regulations including the so-called 'balance principle', have also historically shielded mortgage bonds from default risk.international monetary fund: the danish mortgage market â a comparative analysis, imf country report no. 07/123, march 2007 high industry concentration and automatic stabilizers also play a role in maintaining stability.michael simkovic, competition and crisis in mortgage securitization in denmark, the mortgage banks are the only financial institutions allowed to grant loans against mortgage on real property by issuing covered mortgage bonds (). the scope of activities allowed to mortgage banks is limited to the origination and servicing of mortgage loans, their funding, exclusively through the issuance of mortgage bonds, and activities deemed accessory. as of 2007, there are eight mortgage banks active in the danish mortgage market, some affiliated with commercial banks. == general == === the "balance principle"=== the danish mortgage credit act imposes strict matching rules between the assets (e.g., mortgage loans) and the liabilities (e.g., mortgage bonds) of mortgage credit institutions. each new loan is in principle funded by the issuance of new mortgage bonds of equal size and identical cash flow and maturity characteristics, dubbed the balance principle or, in,housing finance systems for countries in transition - principles and examples. united nations, new york and geneva, 2005 the balanced book principle (p.&nbsp;29). the proceeds from the sale of the bonds are passed to the borrower and similarly, interest and principal payments are passed directly to investors holding mortgage bonds. moreover, the mortgage credit act establishes strict lending rules which differ depending on the type of property financed. maximum loan to value (ltv) ratios and lending periods are set up for each category of property. while for all categories of properties, the maximum lending period can be up to 30 years, maximum lending limits differ significantly according to the nature of the mortgaged property. for owner-occupied homes, rental properties, cooperative homes and housing projects, mortgage loans can represent up to 80 percent of the value of the property. in
Housing_in_Denmark Mortgage