The Credit Risk Research Of China's Housing Mortgage Loan Securitization

On Dec.15th,2005,People's Bank of China approved China Construction Bank as the pilot of securitization of house mortgage loans to issue asset-backed securities(ABS) in inter-bank bond market.After 10-year brewing,securitization products which have been popular in foreign countries for about thirty years formally appeared in China.The implementation of the housing mortgage loan securitization is imperative ways.However,there are some risks,especially the credit risks caused by the borrower and the third-party investors violations which have greater impact on the realization of investors interests and mortgage securitization business smoothly carries on.This paper's research object is mortgage-backed securities and its credit risk,and it divided into four parts.The first part briefly introduced the background,research status,contents and methods.The second part introduce the content and operation mechanism of asset securitization and mortgage-backed securities,and introduce "Jianyuan 2005-1" through its trading profile,the state asset pool, credit enhancements,credit rating to illustrate the development and the problems of China's housing mortgage loans securitization.Then the third part analysis the credit risk of the housing mortgage loan securitization,and noted:the two main sources of credit risk is the borrowers' credit risk and the third party investors" credit risk.Analysis these two sources of risk characteristics,causes,factors and their impact on the securitization business development.Then in the fourth part analysis the preventive approach to credit risk.The precautions of borrowers' credit risk have build credit system,establish a personal credit assessment model,establish individual credit risk 'early warning systems,establish the borrower' insurance mechanism.To prevent third-party' credit risk,we should achieve personal housing mortgage loan' assets pool quality standardization,credit enhancements,credit ratings,introduce financial insurance and guarantee mechanisms,and establish a corresponding system of laws and regulations.In each of the sessions,there is a more specific operation,hoped that though in-depth analysis of housing mortgage loan securitization's credit risk,to find an effective way to deal with the risk and provide information for regulatory bodies,main securities companies and investors involved in.