Housing Mortgage Asset Securitization Legal Issues

The deepening of economic life continuesly promote innovation of financing which meets the diverse needs of investors. The arising of asset securitization is complying with this requirement. The emergence ofAsset Securitization results in a series of system innovation, market innovation and technology revolution. Because of risk transference, reprovement of circulation and credit innovative, various countries and regions gradually accept Asset Securitization.China's asset securitization was late,and the relevant theoretical study is still in exploration. Especially mortgage securitization of assets is in the start phase. In order to regulate China's asset securitization activities, the first legislation on Asset Securitization issued "Management on credit Asset Securition issued in 2005" . But there is some conflicts with regulations. Therefore the legal environment of implementation on Asset Securitization should be improved. In practice, December 15, 2005, State Development Bank and the China Construction Bank issued Kaiyuan credit asset securitization and Jianyuan personal housing mortgage loan in the inter-bank open market which signifies thebeginning of China's securities assets.Because the Mortgage securities is the earliest type of asset securitization, its theory and practice is mature. From a legal point of view. This paper tries to raise questions and rying to solve the problem.This paper is composed of five chapters with a total of 30,000 words, which Propose the key to quesionsr, includes the basic definition of Asset Securitization , operational processes, the legal status of special-purpose vehicle ,the deficiencies of legislation and recommendations of author.In first chapter, the concept of assets securitization, principles of operation ,the characteristics of asset securitization are discussed. Asset Securitization refers to the orignators sell assets to SPV,which is lack of mobility at present, but have a certain period of stable predictable cash flow in the future, and through a series of stuucture by SPV to restructure and separate the risk of assets as well as the incong of asset. So as to transform assets into circulation securities and ultimately o achieve financing. Besides the basic concepts and processes of Mortgage loan assets are also described.In second chapter, some legislations of the foreign countries and regions on the assets securities are explained, the focus is the legislation of United States, Japan, Taiwan and South Korea. Through analysis of the different countries and regions ,the paper hold that the formulation of legislation is on the basis of different conditions,and we should base on own national conditions and to improve.In third chapter, the concept of mortgage loans and the housing mortgage loan securitization of asset are dicussed. Some legal relations are analysized,such as banks and housing loans, etc. On this basis, the participants of housing mortgage loan securitization of assets are divided into two parts namely the main participants nd auxiliary participants.In the fourth chapter, SPV is mainly elarobated there are three models about SPV, inclding company, trust and limited partnership. After analyzing the various models, The paper holds that the special-purpose trust is the best modle for China in the existing legal framework. Make an analysis of the relationship of SPV and orignators,the relation of SPV and investors,the relationg of SPV and other intermediary agencies,and makes analysis of the legal relation in the process of credit enhancement. The paper hold that SPV should maintain its legal independence,and its work shoud be limited to the issuance, guarantees, transactions of mortgage securities. Besides, the paper hold that the default of contract should be considered, and its impact should be deleted from two sides .The key points to SPV is to keep its independence.The fifth chapter makes an analysis of the legal obstacles on asset securities in China and the corresponding advanced views.the author holds that two obstacles should be solved, the first one is the conflict of related laws and regulations for asset securitization to define the Asset Securitization,the second one is some problems of special purpose trust are not clarified, such as the possibility of future property trust, the attribution of ownership of the trust property.This paper mainly probes into the method of comparison, analysis. The innovation of this paper lies in three points, First, the organization pattern of SPV could only be trust; Second, the effective of default contract is clarfied and solutions are put forward; Third, some legislative suffestions are proposed.