Investigation Of Risk Assessment Of Reverse Mortgage And Corresponding Strategies

Unlike many western developed countries, our country stepped into an aging society with a comparatively low per capita income (PCI). The high speed of the aging procedure imposes a considerably heavy pressure on our society, resulting in an instantaneous necessity of novel social endowment mode that could adapt to the current situation. However, our country is still in the phase of evolving from the old fragile one to a relatively fresh rigid one in all aspects, which indicates an incomplete, immature social endowment system. To compensate for the inadequate functionalities of the present social endowment structures, we need to investigate all potential strategies and adopt them subjecting to our situations. Reverse mortgage, which is a model from western developed countries, partially resolves the difficulties of retired life of senior citizens. Nevertheless, in reality, promoting of this policy to our motherland encounters numerous difficulties and complications, i.e., the risk identification and assessment is one of the several essential issues that must be addressed very carefully.The thesis starts from the discussion of the trend of current aging population and continues with the illustration of background information and contributions of this work. The state of art researches in the same area are provided with intensive discussions of the definition, analysis, and fundamental theory supports of reverse mortgage. Later, the thesis proposes a frame work for identifying and assessing the risk of reverse mortgage. A detailed analysis of one's anticipated length of life, interests of loan, as well as the estimated housing expenses and their potential causes are presented as well. In particular, the thesis offers an intensive investigation of the relationship between variations of housing expenses and the pricing policy of reverse mortgage. Based on the corresponding analysis of the risk and fundamental theory, the thesis implements an adaptive model to identify and assess the risk of reverse mortgage in our country by utilizing a genetic network algorithm. Following the discussion of several categories of the risk assessment of housing expenses, the paper aggressively research the utilization of BP reverse broadcasting network in the context of estimating variations of housing expenses. The thesis further provides a quantitative mathematical model to evaluate the risk of reverse mortgage. Based on the reverse mortgage theory and risk estimation discussed in the previous sections, the thesis promotes several methodologies to adapt reverse mortgage to special situations in China. In the last section, the limitations of this work are provided with several potential future directions.