Comparative Study Of The Housing Mortgage Loans, Securities Pricing Theory And International Experience And Revelation

In recent years, securitization of mortgage loans has attracted the attention of academy and industry in China's finance innovation. It is an important instrument of activating the housing capital market, which can improve people's ability to pay and provide more accessibility for housing; in the same time, it is a better hedge for lenders to avoid their financial risks in the complex housing issue.It can be demonstrated by using appropriate financial instruments, securitization of mortgage loans can make a substantial contribution to housing finance. We believe, as the housing demand increasing, as more and more lenders being constrained with liquidity, as investors becoming more and more familiar with the risk, the application of such financial instruments will be more frequent.However, in the emerging economies, since institutional investors can often hedge their risks better, it is the lenders who bear almost or even all of the interest risk. Therefore, in the emerging economies, securitized mortgage loans should provide more shelter to the lenders in some degree.However, just in the.time when the U.S. mortgage securities were growing into role models for the world, and a wide variety of loan securitization was ready to come, a subprime mortgage crisis since 2006 wiped the American economy, and eventually spread to the entire international financial markets, triggering international financial crisis one in a million.Undoubtedly, it is an alarm for our toddler housing mortgage loans, and we have to bear in mind that it is not the mortgage securities product that caused the subprime crisis. Rather, the root is the quality problem of the fundamental asset securitization and the accumulation of credit risk.We have to re-examine the whole system of housing mortgage loan securitization and practical experience in different countries, in order to provide recommendations for our country to promote securitization of mortgage loans.This paper attempts to summarize the practical experience and current situation of mortgage loan securitization in emerging countries and regions, to learn from them, analyze the inspiration of subprime crisis to China's housing mortgage loans securitization. Starting from the pricing principle of mortgage securities, combined with the status of China's housing mortgage loans, we try to discuss the feasibility and necessity of the securitization implementation, and related programs needed, in the end, we put forward policy recommendations.