Research Of China's MBS Pricing Model

1960s-1970s,Mortgage-Backed Securities (MBS) originated in the United States. As a new financial tool it has played an important role in adjusting demands of American housing industry and promoting social stability, so, other countries in the world gradually followed. Implementation of the MBS is of great significance in reactivating the long-term mortgage assets, increasing capital adequacy rate, and broadening the financial channels, increasing operating income for banks.Recently, there are more and more research on the MBS, but these studies mainly focused on the successful experience of foreign countries, as China's own unique characteristics, we can't just copy foreign policy and regulations. We need to select the appropriate status of China's housing mortgage prepayments prediction model and MBS's pricing model type. Only the appropriate mode can play the best role for finance, banking, capital market and the real estate market..Firstly, this paper describes production and development process of MBS, focus on introducing abroad Mortgage-Backed Securities in advanced experience and policy system; Secondly, this paper introduces the prediction model of the housing mortgage loan prepayments, as well as chooses the model which is suitable for China's national conditions forecast model; Thirdly, this paper introduces the pricing models of MBS, and compares their advantages and disadvantages in light of China's current situation, in order to select the most suited to China's status of the pricing model and the application of this model to specific examples pricing analysis; Finally, against the obstacles of our country, I raised some proposals.I hope that the adoption of this study can provide some useful suggestionson the implement of China's MBS.