A Prepayment Prediction Model Of Housing Mortgage Loans And A Design Of Penalty System

If the mortgagors of housing mortgage loans are not in accordance with the way of repayments of the loan contract, but repay the loans at all or a part of the loans before the payment is due, so called prepayments. This behavior may cause risks to all the parties concerned of the housing mortgage loans, in our country, especially for the commercial banks.Recent years have witnessed the general trend of prepayment in some regions due to the development of personal residential mortgage and the sustained increase of loan interest. Recently commercial banks have worked out more or less measures to restrict prepayment, which indicates that commercial banks’ attitudes towards prepayment have changed:at the very start of the business of personal residential mortgage, prepayment was acquiesced while now it is restricted and controlled. For example, some banks carried out penalty system to prepayment. But, there is not a harmonized standard among bank industry. Thus, this article is working for the study of the best design of the prepayment penalty system.This article is divided into six chapters.The first chapter mainly introduces the major research direction and results about prepayment. Overseas research, in the United States, for example, including of different methods to measure prepayment, the influence factors of the prepayment and prediction models and so on. By comparison, domestic research has a large gap.The second chapter includes two sections to study the prepayment behavior of individuals housing mortgage loans. First introduces some basic knowledge of the housing mortgage loans; then the conception, types of prepayment are introduced, and based on overseas studies, making a summary about the factors influencing prepayment.The third chapter attempts to establish the prepayment prediction models for our country, and carried out an empirical research. The empirical result proved well, which could be used to predict the prepayment rate in the future.The fourth chapter firstly analyses the nature of prepayment. Considering that prepayment is an act breaching of the contract law. Also, it can cause economic damage to the banks. Then this chapter compares and analyzes the prepayment penalty system in some representative countries and regions.The fifth chapter establishes a simple prepayment market model, showing that the prepayment penalty rate has a positive association with the prepayment rate; then we can base on the prediction of the prepayment rate to determine the best prepayment penalty rate; finally is the specific design proposal.The last chapter is the conclusion, including the main work and the shortage in this study.