Mainland China And Hong Kong Equitable Mortgage System, A Comparative Study

equitable mortgage is a guarantee means by which a house buyor can raise a loan from bank to pay the house he has bought before. It originates from mortgage, an old British security means, and then it was developed and used mostly within real estate market and financial market. Since 1990s, it has been implemented widely in Mainland China. As a new security means for loan, it has broken the limit of the traditional real guarantee thoery, and initiated a new real guarantee means by which real estate company can raise a loan from banks easier, banks reduce his financial risk and house consumer be available to buy house ahead schedule. Further more, it can also take active and remote effect on Mainland China economic reform and development by inciting consumption, enlarging nation's supplies and promoting Chinese accommodation policy. However, it turn out to be very difficult to find a good legal status to suite the equitable mortgage in mainland's legal system, because there exist many differences between Hong Kong's and the mainland's legal system. So the absent of equitable mortgage law in Mainland China has affected its economic function bring into play. It has been known that it is the obscure recognition of the equitable mortgage theory that result in legislation leg behind. In order to make clear about the reality of the equitable mortgage and find out the real reason why equitable mortgage has met so many difficulties in Mainland China, this essay make the equitable mortgage in Mainland China compared with the one in HongKong. And then, based on the feature of the guarantee legal system, present value trend of jus rerem and the study about the expecting right's theory, this essay suggest that the equitable mortgage in Mainland China should be changed and absorbed into the hypotheca law system, and explain the rationality and necessity of the suggestion. After that, this essay also suggests to improve the rules and regulations about the equitable mortgage in Mainland China by refering to Hong Kong's successful experiences about it. Finally, this essay intends to set up an outline of law system for the equitable mortgage in mainland China so as to make it ruled by law.