Research On The Legal Risk Prevention Of Real Estate Mortgage Loan In The Commercial Bank

With the China’s real estate development and the reform of land using rights, theinstitution of real estate mortgage loan has been produced as the production of China’smarket economic and financial reform. Actually, it has contributed a lot to the realestate in China, and made millions of people’s housing dreams come true. It has alsobeen the sparkling and attractive spot of commercial banks for the income of realestate mortgage loan is considerable and less risky. However, along with thenon-performing of the real estate mortgage loan grew year by year and the sub-primemortgage crisis happened in U.S.A, the amount of real estate merchandise has becomedepressed increasingly in some cities. All of these tell us, we should pay moreattention to risk prevention when the profit grows.Real estate mortgage loan has a relatively short history in China, the devel opmentof its operation mechanism and oversight system are still in the premier stage inwhich improvement are needed. With real estate as its mortgage, it is easy for the riskto be overlooked. We should recognize that the implicit risk of the real estatemortgage loans is unobvious in the beginning of the loans, but with the long term ofreal estate mortgage, commercial banks will encounter some factors which cause risksin the process of getting back all the loan balances. China’s current legal can notproduct commercial banks’ interests completely. If there are no effective measurestaken out, serious of economic and social system risks will occur.How to identify and deal with the risks are important issues worth to pay attentionto and get more researches. Currently, although we have already set the legal systemin terms of the real estate mortgage loan, the system still remains a lot of problems,such as imperfection of the institution, deficiency of the prevention efforts andmaneuverability and so on, even with a lot conflicts between laws and regulations.These reasons directly result in commercial banks difficult to achieve creditor’s right.Therefore, we need to put forward methods for the institution to supervise andadministrate the real estate mortgage loan and prevent risks, improve the level oflegislation and complete of the institution and the improvement the level oflegislation. Only in this way can we reduce losses when the risk occurs.