The Study On The Issue Of Our Commercial Mortgage Loans Risk

Banking is the core of modern economic operation and the macroeconomic regulation and control instrument, the key of money circulation and the basis of implementing national macroeconomic regulation policies. One the one hand, it increases coefficient of saving to investment, and increases factor input quantity. On the other hand, banking has become the major part of our national economy by improving resources optimization allocation, increasing factor productivity and promoting national economy growth. However, the trade nature of banking as operating on high debts will result in the fragility of banking system, which may meet, various kinds of risks in daily operation such as credit risk, running risk, market risk, national risk and so on. These risks are latent, diffusible and destructive. Without timely follow-up, analysis and quantification of the financial risks, the accumulation and spreading of individual financial agency risks may likely fall into trade risks, further into system risks, and eventually into financial crisis. Once it breaks out, it will bring tremendous impact on a nation's economy growth and social stability. It may even affect the world-wide economy. Recently, after undergoing the Mexico financial crisis in 1994 and Asian financial crisis in 1997, governments of many countries stress more on the prevention and resolution of financial risks. Particularly the breakout of American sub-loan crises attributed to the domestic real-estate indebtors breach in 2007 has triggered the global financial crisis. Therefore, the prevention and resolution of banking risks, especially the prevention and resolution of the credit loan risks has become the collective concerns and in-dept research subject of financial supervision departments of all countries, of relative researchers and of practitioners.Banking mortgage loan service, as one of the most essential banking businesses, is not only the major means of banking support of economy growth, but also the crucial chain of prevention against credit loan risks. The key chain of banking mortgage loan service is the pledge assets value determination, yet the key of assets appraisal is to evaluate the price of some selected stock, which is the effective way to find the value of mortgage asset. If mortgage asset can be determined by timely, dynamic, objective and fair asset appraisal, we can make good use of the value discovery of asset appraisal in banking mortgage loan service to prevent and resolve the risks of mortgage loan, which will significantly strengthen the ability to guard against the credit loan risks.By integrating the methods of summery, induction, comparison, normative analysis and quantities analysis, this paper discusses the grave situation our banks are currently facing in terms of management and prevention against credit risk, raises the urgent awareness of breach risks of mortgage loan, analyzes the various risks of banking mortgage loan service and points out that credit risk is the most severe risks of mortgage loan. It also summarizes the theories and developments of credit risk measurement and management home and abroad, the theories and developments of credit risk measurement study based on mortgage asset value study and the theories and developments of mortgage asset value appraisal study, which provide the basis of theoretical study for this paper. Based on the credit risk measurement by Barthel new capital framework agreement, this study makes an analysis of the impacts of mortgage assets value on breach risks in four factors as breach risk exposition, breach rate, breach loss rate and effective deadline and from practice normative perspective, emphasizes the study of issues arised from the practical application regarding mortgage assets appraisal on the mortgage loan risks prevention, its causes and effects on credit loan risks. It further discusses the conduction mechanism of the value of mortgage asset appraisal to mortgage risks and points out that the appropriately scientific determination of the value of mortgage asset appraisal has great impact on the prevention against the mortgage loan risk. From loan risk prevention perspective, we find out the mortgage asset value type suitable to mortgage loan purpose mortgage loan value type. By quantative analysis method, the correlation dependence analysis has been made on the core index of breach rate in mortgage loan breach risk prevention and mortgage asset value appraisal in mortgage asset value appraisal business which is the crucial reference when bank loan is released. This again stresses that sensible determination of mortgage asset value is the key measure guarding against the mortgage loan risks. Based on the relevant data from some listed companies through positive analysis, comparison analysis is made between conventional Fisher breach risk judgment model and Logistic model, on which concludes that Logistic model suits our study better. This paper studies how to include mortgage asset appraisal value into the indicator system of risk appraisal model. We also classify the mortgage loans by their own characteristics, and talk about the conception that fits the two logistic models and rejudges on loan enterprises. Based on the analysis of applicability of conventional method of evaluating mortgage asset, it is discussed the weakness of the conventional method of evaluating the mortgage asset value in practice. Accordingly, based on management of whole banking mortgage loan risk, considering the demand of gaining profit from the loan, bearing certain degree of banking credit loan safety, we raised the novel method of mortgage asset value appraisal by credit risk measurement theory -- or loss discount method. With CreditRisk+ model, by quantative analysis, the limitation and the outlook of or loss discount method is elaborated. Based on the borrowed overseas practical experience of mortgage asset appraisal, in terms of banking risk management and of mortgage loan service practice, we raise some fresh suggestions on improving concepts of our current mortgage asset value appraisal and on policies justifying the use of mortgage asset value appraisal to prevent the credit loan risk.This study, starting from the prevention againt banking credit loan risk and from the integration of particularity of taking banking mortgage asset appraisal as mortgage conduct and the universality of asset appraisal, with credit risk appraisal theory and method, discusses the effect of mortgage asset value against breach risk and conduction mechanism of mortgage asset appraisal against risk affect. Revolving around the how to scientifically judge, assess, figure out the value of mortgage asset, and modify appraisal method, this study centers around a series of discussions regarding our national mortgage asset appraisal practice, effective prediction and prevention against breach risk and contributes some suggestions on policies based on research results from banking risk management perspective. This paper also has some theoretical and realistic implications on how to prevent and resolve the banking mortgage loan risk and to help strengthen the capability against credit risk.