A Study On Credit Risk Of Housing Mortgage-Backed Securitization

Housing mortgage-backed Secretions as a structural derivative financial product has been developing rapidly in today's international financial market. Following with the developments of financial market and the deepening of our banking reforms, China's mortgage-backed securities, which are still at a low level at present, will be bound to become an important way to increase liquidity and transfer risk for commercial banks. Nowadays, Residential mortgage is considered as high-quality loan by Chinese commercial banks and the bond issued on basis of such asset is also favored by investors due to its low default and stable incomes. The subprime crisis broke out in 2008 demonstrated to us the credit risks'harmful effects of asset-backed securities on the international financial market. And such effects are still continuing. Therefore, it has extremely important practical significance to study how to prevent the credit risks in our China's securitization during this period.This paper firstly introduces the background and significance of the research topic, and then has a brief introduction about the basic theory of aseet securitization and the formation mechanisms of credit risk of residential mortgage-backed Secretions. Then the factors of the subprime crisis were analyzed, and take this compare with the status quo of credit risk of China's housing mortgage-backed securitization, pointed out that our country has some similar characteristic triggered U.S. subprime mortgage crisis, and because macroeconomic environment will possibility be changed,credit risk will likely large-scale happen. This paper further to take jianyuan 2007-1 housing mortgage-backed securities as example to analyze the evolution trend of our country commercial bank securitisation credit risk. Combining the example simulation of changing background, it is proved that the real estate market products in house prices continue to fall, credit risk the possibility will increase. Finally, this paper points out that we should improve the housing mortgage-backed securitization credit risk recognition mechanism, the control mechanism and public mechanism to prevent credit risk of housing mortgage-backed securitization.