The Research On The Mortgaged Assets Appraisal

The Financial institutions issue mortgaged loans to secure the loans. They can serve as the compensation value when the borrowers fail to repay them. The mortgaged assets have the role of security, compensation and alternative. Mortgaged assets appraisal is the basic requirement of our banking system and serves as the necessary procedure before the loan. It plays an important role in helping financing for the firms, safeguarding the financial assets and healthy development of the financial market. However in reality, financial institutions treat the appraisal only as an unimportant factor and fail to be a true user of the appraisal report. Due to the lacking of faith system, the borrowers do what they can to manipulate the appraisal in order to get more funds from banks. All of these factors pose serious threats on the security of the financial assets. Compared with the developed countries, our researches on the mortgaged assets appraisal are insufficient and lag behind the practice. It is obvious that the situation will not only have an adverse effect on the Appraisal industry, but will cause financial crisis and threat the economic security.Based on the present situation of the appraisal, the paper states that in reality, the borrowers do what they can to manipulate the appraisal in order to get more funds from banks, the appraisal value is too high to realize; Different factors have effect on the mortgaged assets appraisal, such as political, economics, legislation, the owners of the assets, the users of the appraisal reports, the appraisal institution and the appraisal staff, the defects of the mortgaged assets and the high fees of the assets disposal etc. From the different views-financial institutions and the borrowers, the paper indicates all contradicts existed in the mortgaged loan appraisal: contradicts between the appraisal theory and the development of practice, contradicts between the limitation of the appraisal methods and the complexity of the appraisal assets, contradicts between the varieties of the aims, contradicts between the validity of the appraisal reports and the terms of the loans, contradicts between the advisory of the appraisal reports and the over-dependence of the users. Then the paper gives some advice to solve the problems. The government should transfer its function and establish a new management mode "regulation by law, supervision by government and self-discipline", The Association should do more study on the mortgaged assets appraisal and set principles on it to regulate the appraisals. The appraisal institutions should strengthen the supervision on the appraisal quality and the staff to reduce the risk. The appraisal staff should improvetheir knowledge and abilities by continual education. The financial institutions should build internal control system on mortgaged assets appraisal to reduce the risk. The supervision department should focus more on mortgaged assets appraisal. At last, to improve the efficiency of the decision, two methods are recommended on the basis of the data analysis. One is the future-value estimation method. The other is present-value modification method.