Research On Residential Mortgage Securitization

This dissertation evaluates the tactics that can be used to implement securitization of residential mortgage loans in China, with regard to policy actions and financial techniques.Residential Mortgage-backed Securities (RMBSs) have been hotly debated recently in China. RMBSs should be approached more systematically and thoroughly to build the bridge between property market and capital market in China.The methodology of paper is that based on reviewing contemporary theories of securitization in academia and the analysis of US matured model of securitization, then proposed customized tactics will be generated to match with the real conditions as to implementing securitization of residential mortgages in China. So the bridge between theory and application can be built.Based on the US model of securitization, the paper distills the American quintessence of RMBS to summarize the basic American principles and ways on RMBS. This paper distills the US government in order to assess the role it played in the securitization process; it also examines the implication of" bankruptcy isolation " and "true sale" of Special Purpose Vehicle (SPV) in order to reveal the fine structure of RMBS; it also details the product family of MBSs (MBS and its derivative products) and the credit rating process and credit enhancing measures in order to extract well-matching techniques financially for China securitization.Then new ideas are created as to how RMBS can be introduced to China on a realistic and sound base. Recommendations are made as to the role that the China government should play in the process of launching and stabilizing the RMBS. The appropriate style of establishing SPV is selected to match the real legal conditions of none legislative support in China. With regard to the financial techniques of implementing MBS, recommendations are made on the credit enhancing measures that should be adopted and main securitized product that should be offered.