The Study On Mortgage-back Securization In The Way Of Special Purpose Trust

Asset securization is a new financial instrument which was created in the 70th last century in USA, now it has become one of the major channels on finance in the developed countries, and mortgage-back securization is the most typical. In Asia, many countries adopted laws after the financial crisis to foster environment for the development of MBS. But in China, mortgage loan was not introduced until the end of last century. Recentlly, experts begun to discuss the meaning of MBS and it's operation model, but because of the under-developed financial and law system, the discussion is still in the primary stage. Now, there still does not come to a common conclusion on the type of special purpose vehicle used in MBS.In the developed countries, there are several kinds of special purpose vehicle such as special purpose company (SPC), special purpose trust (SPT) and limited partner which have been successfully used in MBS. At present, SPT is superior to other special purpose vehicles on institution construction, risk isolation, avoiding re-taxed. Hence SPT is more practicable. In this article, the author engage on the law body of securization and compare SPT with SPC to illustrate that SPT is more suitable for MBS in China and then to study the shortcoming of the financial environment and Chinese laws on this aspect to develop MBS. Finally give some advice on how to revise related laws and improve the financial environmemt so as to develop MBS. There are eight chapters in this article .The first chapter is introduction which gives the background of this article and the purpose of the writer. In this section, the research status of on mortgage-backed security in China and aboard is also given;The second chapter describing the meaning of securization and it's history , types and procedure so that the readers can have an overall view on securization; The third chapter studying on the types of special purpose vehicle and comparetheir function;The fourth chapter showing some SPT examples in advanced countries so that wecan refer to their experience;The fifth chapter discussing the meaning of mortgage-back security for China.The sixth chapter showing the restriction on what we should do to develop SPTin China;The seventh chapter giving advice on dealing with those problems discussed inthe sixth chapter;The eighth chapter is conclusion.