Font Size: a A A

China's Real Estate Mortgage-backed Securities Design Problem

Posted on:2003-04-22Degree:MasterType:Thesis
Country:ChinaCandidate:Y PanFull Text:PDF
GTID:2206360092971256Subject:National Economics
Abstract/Summary:PDF Full Text Request
Financial innovation has accelerated the process of the development of world economy and the globalization since 1970s.The number of financial derivative instruments creating from financial innovation and of financial trade, has been increasing very rapidly. And it has become the new way of the development of financial market in the western developed country. Among so many financial derivative instruments, Mortgage-Backed Securities (MBS) in Real Estate is the most important one.The development of the market of MBS has not only enlarged the capital resource of housing credit, and reduced the purchasing cost of housing, but also improved the capital structure of the financial institution ,build up the capability of resisting the financial risk and promoted the co-prosperity of housing and financing industry in the western developed country. Therefore, MBS is the most important financial instrument innovation in world financial market over 30 years and has been broadly applied in security market.In China, with the deepening of economy system renovation, it is very imperative to accelerate the combination of housing and financing industry which will make full use of land and capital. However, by far, our nation has not the least experience of developing MBS market and also can not follow the ready-made experience. Consequently, we should use the succeeding experience of. developed country for reference and create the condition of realizing the securitization of housing mortgage loan to improve the housing consumption and drive the economy going up.Considering that the issue of MBS is a very complicated financial innovation project, this article mainly focuses on the study of structure design and valuation technology in MBS based on absorbing the innovation product of MBS and then comes up with the ideas of developing MBS market in our country and some policy suggestion with regard to the perfection of market surroundings.The detailed arrangement of the major content of various sections in thisarticle is as follows:Section I, General Introduction. This section begins with the definition of MBS in Real Estate, then briefly reviews the history of MBS and analyses the MBS market status quo and introduce various latest MBS derivative products. After that, this article makes an necessity and feasibility study on our country's real estate mortgage loan securitization. This article point out that the issue of MBS in our country has been provided with practice conditions and worth with more study.Section II, Study on the Function Mechanism of the Primary Products of MBS. This section begins with the analysis of the cash flow of the two mostelementary products-Mortgage Pass Through Securities (MPT) andCollateralized Mortgage Obligations (CMO) , and describes the difference between the function mechanism and the ability of resisting risk. Then, based on the above analysis, this article tries to invent an new CMO product which goes by the name of Adjustable Amortization Mortgage (AAM) and can effectively counteract the extension risk when interest rate goes up. At the same time, this article also indicate some problem which should pay special attention to in practical application and put forward some corresponding market promotion strategy. Finally, this article makes comparatively systematic analysis of the overall structure design of Real Estate MBS in our country at present.Section III, Study on the valuation model of MBS. First, this section resorts various valuation model and hold that it would be better to classify the valuation into traditional method, binominal tree method and Option-adjusted Spread method. According to the sequence, this article introduce three valuation model respectively and point out which aspect these method improves on in different phases and their applicable conditions. Finally, this article discusses the selection of valuation of MBS in our country at present and concludes that under our country's current economical environment, we should take traditional present...
Keywords/Search Tags:Mortgage Loan, Cash Flow, Valuation
PDF Full Text Request
Related items