Research Of The Precaution Of Legal Risks In The Commercial Real Estate Mortgage In China

Fundamental differences exist in the mortgage law between the mainland of China and Hong Kong. By comparing the mortgage with other related similar actions, it can be said that the mortgage in China is just one new type of securities interests. Multiple parties involve in the commercial real estate mortgage. The main parties involved include banks, developers, buyers (that is, the borrowing applicant) and insurance company. The principal actions concerned in the mortgage loans include the sale of commercial real estate, loan, mortgage, guarantee and other acts of civil law. Different parties have differentiated rights and obligations in different legal relationship. Thus, the legal risks in commercial real estate mortgage have different types according to some standards. According to arising root sources, the risks conclude those lead by developer, buyer, bank and others. According to the borne subjects, the legal risks conclude those born by developer, buyer, bank and so on.In order to effectively prevent and resolve those risks, several measures can be taken. First of all, identify the mortgage loan contracts to enhance its effectiveness, effectively identify the signature by the true borrower of the loan contract and the forged the signature in the purchase contracts. It is necessary to strengthen the legal punishment mechanism against the false mortgages, non-mortgages. Second, banks should enhance their own legal risk prevention, make good investigations of developers, of development projects, perfect the review mechanism against the mortgager, make a good supervision after the mortgage loan, strengthen internal management, take preventive measures to enhance the transparency of the loan. Thirdly, it is emergent to improve the real estate appraisal system and individual credit mechanism, the amount of real estate mortgage loans should be price-based on the evaluation. The evaluating method adopted should be cost method so as to improve the technical content of the evaluation report. A clear priority should be made for the repayment. The individual credit files registration &evaluation system should be established. And early warn and management systems about individual credit risk should also be establishment. Finally, the disposal methods for the bank's own mortgage collateral property should be innovated, such as introducing an insurance mechanism to decentralize and transfer the risk of mortgage banks.