It is well-known that house prices declined sharply and mortgage defaults increased abruptly from 2006 to 2010 in the U.S. In Europe, where mortgage regulations are significantly different, the behavior of house prices and mortgage defaults displays somewhat different dynamics. Comparing the experiences in these two regions sheds light on the impact of alternative regulations. Figures 1 and 2 show the evolution of house prices and mortgage defaults in the U.S. and Europe, respectively. To facilitate the comparison, both series are normalized to 100 in 2007. In the U.S., house prices declined about 20 percent during this period, and defaults increased by about 300 percent.1 In Europe, house prices declined much less, slightly more than 5 percent, while mortgage defaults increased little, about 26 percent from trough to peak, 2007-2010.2 Given that changes in prices and defaults are different, it is hard to compare the experiences in Europe and the U.S. directly. Here, this problem is dealt with by comparing changes in defaults for periods in which the changes in prices were similar in the two regions. T he first panel of the table compares changes in mortgage defaults in Europe and the U.S. for periods when the change in prices was similar. From 2008 to 2009, prices declined almost 7 percent on average in Europe. As a response, default rates increased, but only by 11 percent. In the U.S., from 2007 to 2008, house prices declined on average by almost 8 percent. The corresponding increase in mortgage defaults was much larger: more than 93 percent.