The Analysis And Precaution Of Residential Mortgage Loan Credit Risk

In recent years, individual residential mortgage in first- and second-line cities is in full swing, to local commercial Banks have brought huge profit As the increasing amount of individual residential mortgage, the risk hided start to emerge, especially credit risk. Credit risk is from the decentralized borrowers. It’s often difficult to control and particularly influential. The expected return cannot be achieved once a mass outbreak of credit risk. It not only brings huge financial losses, but also brings an adverse impact on sustained development of commercial banks. How to effectively prevent the credit risks on individual residential mortgage is extraordinary important, accordingly, study on credit risk is also very necessary.According to the line of thought "theoretical generalization of individual residential mortgage credit risk - current management situation-empirical analysis-risk management and preventive measures", basing on the data concerning individual residential mortgage of the certain commercial bank, drawing lessons from domestic and foreign mature theory and research results, the paper select 17 relevant variables of individual residential mortgage according to the borrower characteristics, loan characteristics, real estate characteristics and external characteristics. For different dimensions of variables, we use cluster analysis associated with a higher degree of factors combined, so as to reduce the number of variables to 13. By using SPSS and MATLAB respectively to carry on the principal component analysis, KMO measure and Bartlett’s test on variables, calculate the correlation coefficient matrix between variables, get the top six root characteristics and its contribution rate. At the same time, the comprehensive evaluation model of individual residential mortgage is obtained. The finding by empirical analysis is that individual residential mortgage credit risk is mainly affected by the impact of these six principal components, in particular the absolute financial burden component. Depending on the extent of these components, commercial bank would give priority to those mortgage applications which the properties location is in urban, monthly repayment of income ratio is lower, loan to value ratio is lower, borrowers are married and highly educated. Finally, according to our practical circumstances, corresponding countermeasures and propose to individual residential mortgage credit risk precaution and control are suggested, including early warning mechanism, control mechanism and transfer mechanism.