Research On Mortgage-Backed Securitization In China

Mortgage-Backed Securitization is one of the most important financial innovations during the past 30 years. Since the first piece of Mortgage-Backed Security was issued in 1970s in USA, many countries and areas have practiced a lot in the securitization of mortgages. Their experience should be used by Chinese Mortgage-Backed Securitization for reference.With the rapid development of Chinese real estate industry, the increase of personal real estate consumption has become the key backbone of the upgrading of consumption. The big amount of consumers helped the development of the Chinese personal house mortgage loans. The personal house mortgage loans of Chinese commercial banks have increased more than 60% per year during the past several years, and have become the most rapid expanding asset business of Chinese banking industry. For Chinese government will start to comprehensively fulfill the WTO agreements at 2007, the capital ratio of Chinese commercial banks will be the bottlenecks of their business development. To reach the lowest Capital Ratio required by BASEL II, together with approaches of enhancing their capital by shareholding system reconstruction, asset securitization of has become an important way for them to increase the Capital Ratio, and maintain the competence to sustain their business increase as well. Therefore, Mortgage-Backed Securitization will become the keystone of the financial innovation in our country in the near future, and will get great attention of the government, fmancial institutions and investors.Based on discussing the basic models of Mortgage-Backed Securitization, this paper focused on analyzing the experience and achievements of Mortgage-Backed Secuntization in developed countnes and areas. By analyzing the external environment, legal restriction and other obstacles of Chinese Mortgage-Backed Securitization, the author proposed his suggestion on how the learn from the foreign countries' experience to improve Chinese Mortgage-Backed Securitization. Based on analyzing the practice of Chinese Mortgage-Backed Securitization, especially the China construction bank's preparing, issuing and exchanging of its"2005-1 Jianyuan" asset backed security, while affirming the explore of this process, the author pointed out its shortcomings and put forward the matters need to be improved.Chinese Mortgage-Backed Securitization has just started to develop. The legal system has not developed related laws and the government has not had the experience and capacity to administrate this business. By analyzing the problems exposed in the process of Mortgage-Backed Securitization, the author tried to propose some suggestions on how to improve the Chinese Mortgage-Backed Securitization and help to extend the Mortgage-Backed Securitization in China.