A Study On The Individual Mortgage Risk Prevention Of China's Commercial Banks

As the deepening of the urbanization process and reformation of housing system of both rural and urban areas in our nation, the real estate industry, as one of the pillar industries of national economy, has get a quick development products. In this context, the individual housing loans emerged as new financial products. As a result of individual housing loans with low-risk, high -yielding the advantages, but also by national policy to support and encourage, the commercial banks have entered the market, therefore, it has rapid business development.The nature of U.S. sub-prime mortgage crisis is sub-prime mortgage lending crisis in real estate market. We have set up individual mortgage risk prevention of China's Commercial banks, but at the present stage there is insufficiency and the difficulty of China's Commercial bank individual mortgage risk management. Commercial banks and non-bank financial institution is the initiator of the crisis. China's individual housing loans is still in its infancy, the risks of individual housing loans faced by China's commercial banks are not as simple as the risks that faced by the commercial banks of United States and other Western countries. In addition to the risk with the same nature that faced by the commercial banks of United States and other Western countries, China's commercial banks also need to face some potential risks caused by our social system deficiencies, such as that China lacks a more perfect home security system to match with the personal loan business of commercial banks. The social system deficiencies will become catalyst that deteriorate the risk of individuals housing loans of commercial banks, China's commercial banks asset quality will be seriously affected in the credit crisis.This paper first elaborates some relative risk theories about the individual mortgage of commercial banks, mainly including rationality violation and the forced violation theory about individual housing mortgage loan, risk management reconsults and the risk control theories- risk management request of "the Bethel agreementⅡ" about individual housing mortgage loan, which makes the theory foundation for the following chapters on the housing credit risk recognition and the management of commercial banks. Next is the description of the current situation on individual mortgage risk of commercial banks in our country, and elaborates the individual mortgage risks and the causes in our country's commercial banks, mainly from the three aspects:commercial bank's transaction opposite party risk, the loan relative service risk and its own management risk. Then the paper elaborates the current situation and comments on the individual mortgage risk prevention of China's Commercial banks, mainly from three aspects: risk control before,in and after loans, and it points out at the present stage the insufficiency and difficulty of China's Commercial bank individual mortgage risk management. Finally with the combination of theories and practices, it proposes the countermeasure and the suggestions on how to build China's risk guard system of individual mortgage from such aspects as banks, individual, society and government management.