Study On Mortgage Backed Securitization

Mortgage backed securitization (Mbs) means financial institutions such ascommercial banks transfer the creditor's fight of mortgage to a particular professionalinstitution such as a securitization institution who will issue securities on capitalmarket based on the creditor's rights it purchased. MBS is also the most common andessential form of Asset securitization.Asset securitization comes from the combination of security skill ramificationand financial engineering skill. It sprang up in the U.S. from the 1970s, then spreadinto the rest of the world, and developed rapidly in the 1990s. As one of the mostimportant financial innovation of recent decades in international financial field, Assetsecuritization becomes a shining star in the wave of financial innovation thanks to itselaborate design and unique function. Although Asset secudtization has variousforms and types and so far there is no uniform definition to it, it is usually considereda process in which capital that lack of fluidity but expectedly yields stable cash afterwas structurally arranged, separating and reorganizing its risk and proceeding factor,transform into a saleable and negotiable security. China is altering its economicsystem. Introducing securitization financing tool has a significant bearing indeveloping China's housing mortgage, long-term consumption credit market anddealing with bad assets. In spite of the fact that Asset securitization has becomemature in developed countries such as the U.S., it is still something new in China.The present legal system will inevitably play a negative role in developing thepredominant financing mode. Asset securitization is a financial innovation and itsoperation involves various aspects such as security, assurance, and non-bank financialbusiness. Since the complication of its operation, it needs a fine legal system tomediate the legal relationship among relative parties in order to insure its successfulrunning. However, China's current rule of law as well as the supervising systemcannot solve the problems arises from the Asset secudtization course. Civil Law,Corporate Law, Security Law, Credit Law, Guarantee Law etc. they providelegislative authority to Asset securitization to a certain degree, but meanwhile a legislative hindrance. Through analyzing how American Asset securitization becomemature, this article put forward a legal framework in which Asset securitization coulddevelop under China's current social condition. I hope this paper could be helpful toChina's research on Asset securitization. Besides introduction and tag, this text hasfour sections:Section one is generality of Asset securitization. It is mainly about theoreticalexamination to Asset securitization, and expounds its merits compared with portfolioand the significance of securitization house mortgage.Section two elaborates relative civil commercial legal problems involved insecuritizing house mortgage. It relates to three aspects: first, stripping of loan, transferof credit right, hypothec transfer; loan sale, assets purchase, real sale; concernedproblems to SPV.Section three is review on overseas real example of Asset securitization. Takethe United States as an example, in this section, it analyzes American Security Lawon regulating its capital security. Through representing how it provides a beneficialenvironment to Asset securitization under the premises of protecting the interest ofinvestors and supervising efficiently, it offers a favorable reference to China's currentpilot practice of Asset securitization.Section four is on China's environment of house mortgage backed securitization,as well as measures and expectations to its future development. This section analyzesthe present legal hindrance to mortgage backed security, and put forward newthoughts and innovations concerned to it. At last, it forecast its future development.