The Feasibility of Estimating the Demand

for Residential Mortgage Credit in Poland

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interesting insights regarding the total volume of mortgage lending, the total number of

loans, the average size of the loans and the distribution by size, the type of mortgage

product, the LTV, loan duration, other loan terms, the general characteristics of the

borrowers, the geographic distribution, and so forth.

No doubt individual banks in Poland analyze their own mortgage portfolio

information internally for use in marketing, just as banks do elsewhere.  These data and

analyses are, of course, not available to the public.  It is a fairly common practice in the

United States for mortgage banks, and all other mortgage finance lenders, however, to

report a variety of aggregate statistics to the U.S. Mortgage Bankers Association (MBA),

as well as certain details of their portfolios.  In fact, a great deal of information on mortgage

lending trends and profiles becomes public knowledge, either through the MBA, through

secondary market institutions such as Fannie Mae and Freddie Mac, or through the

Federal Reserve.  As elsewhere, however, only individual banks analyze their own

portfolios using a household/loan level microeconomic approach.

However, the question may be addressed as to whether banks would be willing to

 strip  their files of confidential information and provide them (a sample of them) to the

Foundation for Mortgage Credit and/or Polish Banks Association, for example, for analysis.

The database could be made fully computerized, which would then easily allow numerous

types of analyses using available software.

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  Thus, without sacrificing too much

 competitive  information, benefits could accrue to individual banks as they make decisions

about institutional approaches and the scale and location of their future retail lending given

a reasonable estimate of potential market demand.   Findings co

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uld be discussed with the

relevant authorities as desired, perhaps in order to press for supportive subsidy policies

such as first time homeowner grants or government sponsored (risk sharing) mortgage

insurance, both of which would be likely to increase the utilization of mortgage credit.

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Finally, the data collected by the Mortgage Fund on the relevant loan portfolios may

also offer an excellent opportunity to study the details of mortgage loans now outstanding

in Poland.

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U.S. banks and mortgage lending institutions either with their own research staffs or through consulting

firms routinely analyze their portfolios. Highly sophisticated software exists whereby banks can analyze what

motivates their customers from every important point of view (analysis of variance, discriminant analysis, etc.).

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It may also be useful to analyze data from the BudBank, collected from the Mortgage Fund; see

annex III.

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Please refer to the recent UIC report on  Public Sector Finance Strategies for Poland,  which discusses

these and other subsidy programs designed to enhance homeownership and encourage the use of mortgage credit

in the process.