Mortgage-backed Securities Research

Mortgage-Backed Securitizition is one of the new bright points in financial innovation since 1970s, which not only profoundly changed the social and economic life of the United States and many countries, but also triggered a series of institutional innovation, market innovation and technological innovation. On the basis of bankruptcy-remote and true-sale, the structure design and market operation of mortgage securitization is to restructure and focus on cash flow and credit works. Its main significance lies in its ability to the main issue of financing to reduce costs, spread financial risk, and enhance the liquidity of financial assets to provide the allocation efficiency of capital markets, and promote the development and prosperity of the real estate market to meet the special requirements of investors.As China's housing system speeds up the reform process, the demand for home mortgages are of rapid growth. Personal housing mortgage loans accounted for the proportion of bank loans are in a corresponding rapid increase, resulting in short-term liabilities of commercial banks and the use of long-term assets contradictions become more critical. Also, an increasing shortfall in funds and the assets of commercial banks liquidity pressure is becoming increasingly serious. How to get rid of mobility difficulties and to avoid financial risks of commercial banks have become urgent solution. The implementation of mortgage securitization is an effective solution to this problem initiative. December 15,2005, China Construction Bank, CITIC Trust and Investment Corporation successfully issued "Jianyuan 2005-1" MBS which marks that research of nearly 30 years of asset securitization has moved from theory to practice. In this paper, first introduce Mortgage-Backed Securities operation and principle, followed by analysis of background and characteristics of the operation mode of the United States, Canada and Hong Kong Securities, and sum up the development of our MBS reference. From the practice of "Jianyuan MBS" to analysis the development of our current state of MBS. Finally offer suggestion on the favorable conditions and the obstacles about the development of China Mortgage-Backed Securitization.