The Impact Of Property Law On Mortgage Of Banks And The Countermeasure Research

The Property Law is a basic law to validate, utilize and protect property. Security interest in property rights is one of the three property rights stipulated in property law,and it has a direct relation with banking. Secured mortgage, which is granted the King of Guarantees, is becoming an increasingly favorable and important Guarantee Method for bank financing. Therefore, good mastery of the Property Law has a far-reaching significance to banks in terms of better exercising mortgage right,forestalling financial risks and promoting the sound development of banking.Breakthrough in mortgage right system in the Property Law has both positive and negative effects on realization of mortgage for banking. On the one hand, in the Property Law, self-employers and agriculture practitioners were listed in mortgagors and the scope of guaranty was enlarged. The principle of puplic announcement and credibility of security interest was established, also floating mortgage was added. Maximum amount mortgage was optimized and regulations for realization of guarantee were amended. There is improvement regarding handling the coexistence of property guarantee and people guarantee the Property Law. All these are helpful to strengthen the banks'ability of business operation , effectively safeguard monetary transactions. On the other hand, the shortened time period for exercising the security interest as stipulated in the Property Law has an adverse effect on banks; floating mortgage with the Property Law, banks may fail to realize mortgage, and enlarged scope of guaranty will increase banks'cost of subsequent supervision and management risks. Effectiveness of real properties registration and objection of estate registration raise a higher requirement to banks. Lawful exception of the priority of compensation for security interest put banks in a disadwantage position in claiming the secured interest, All these bring challenges to management of banks; therefore, the banks have to attach great importance to them.Aiming at the influence on banks'mortgage with the law, banks should cope with it actively. Firstly, one should study the law completely and take full advantage of new stipulations, that he should innovate credit products positively and extend new profit growth point. Meanwhile, one should perform detailed management to credit, avoid the risks from new stipulations of the law, and ensure limitation of action and against the third party effectively. Furthermore, whether there are exceptions of the priority of compensation for security interest shall be concerned, attention shall be given to use the combination with Property guarantee and people guarantee.