Individual Residential Mortgage Loan In China Defaults Impact Factors Study

Since the Construction Bank of China lent the first loan of residential mortgage in 1992, it has been accepted by the masses of residents gradually. By the end of 2009, bank's loan balance of residential mortgage already exceeded 497 billion Yuan in China. It still increases fast at the speed of 40-50% per year. Meanwhile, default risk rate of residential mortgage begins to soar constantly too. Average default risk rate of residential mortgage was about 1.58%, and potential risk has already appeared gradually. Now, financial circles in China have generally realized the necessity and urgency of strengthening residential mortgage default risk management, and academic in China has also paid attention to it. However, systemic theoretical researches and empirical researches are still blank in this field. Based on such backgrounds, the dissertation regards the determinants of residential mortgage default risk as research object, and attempts to identify the major determinants, and carries on risk clustering. This research will help banks build theoretic and technological foundation to reduce default risk at the beginning of residential mortgages lending.The issue, individual residential mortgage loan default risk factors has been studied in a long period. However, up to now, researches on cases of the project detain on classification analysis, as well as lack systematic and relevance studies. Moreover, positive method is singleness. After making effort on individual residential mortgage loan default risk factors positive research, the problem, variable quantity choice, is solved by figuring three variable quantities, including borrower characteristics, the financial burden on households, mortgage features. Discussions on interactions of variable quantity are blank. Therefore, structural equation model is used to model path plot, the relationship between manifest variable and latent variable is analyzed, as well as the relevance between one manifest variable and other manifest variable, in order to explore the interaction between them.Studies are put forward to get the conclusions. Among all borrower characteristics, Loan to value factor affects borrower most on choosing default or not. Meanwhile, age nature is vital in certain extend for borrower to obey the rules. In mortgage features, loan amount is a huge influence factor for borrower. Above all positive analysis, two suggestions are put forward to meet the problem. On one hand, commercial bank operation manage should be improved, on the other hand, risk controlling management should be strengthened. In that case, it will reinforce management on the individual residential mortgage loan default risk controlling.