Study On Innovation In China's Residential Mortgage Insurance Programs

Since the first residential mortgage in 1992, especially after the reformation of the china's housing system in 1998, the business of residential mortgages has effectively stimulated domestic real estate market and promoted housing finance. However, with the quickly growth of the residential mortgage market, the lower and lower loan limits, and the change of the borrower from the high-income residents to the medium- and low-income, the bank has been increasingly subjected to the exposure of mortgage default risk. Therefore, it is the present problem to be solved urgently that how to circumvent and disperse finance risks in bank system so as to promote the healthy development of residential mortgage market. Under this circumstance, this thesis studies innovation in China's residential mortgage insurance programs in order to improve the healthy development of housing finance.At first, This thesis analyzes sorts of residential mortgage risks, brings forward some methods of risk control, points out that insurance is the most effective way to transfer the risks of residential mortgage, and introduces some insurances on residential mortgage in domestic financial market and abroad, expounds particularly the successful experience of USA where the business insurance agents, FHA and VA provide full ensurance for the loans of bank to disperse default risk, thus promotes the prosperity of real estate finance. Secondly, on the base of analysis about the current situation of domestic residential mortgage insurance, this thesis points out the existing problems, emphasizes that the biggest deficiency is the illogicality of insurance frame, and analyses the opportunities and challenges of domestic residential mortgage insurance with China's entry into WTO, brings forward the urgency of innovation in China's residential mortgage insurance programs. At last, this thesis puts forward some advices to perfect the deficiencies of current insurance, mainly tackles the problems of default risk the banks faces, puts forward the innovative programs such as residential mortgage life insurance and default insurance to solve this problem, and provides a systematic analysis of the theoretical conditions and policy support on the development of default insurance.