Real Estate Mortgage Backed Securitization Research

The securitization of mortgage-backed loans means loaning institutions such as banks regroup the mortgage-backed loans according to certain natures, restructure the asset pool through guarantee and credit enhancement and then sell their creditor's rights to investors in terms of securities. With the development of the economy, banks are short of investing funds and investing channels while deposits stay high. The securitization of mortgage-backed loans is an important way to solve this problem; it also changes the traditional financial media fashions by setting up a more efficient financing channel between debtors and creditors; credit-providing financial institutions are beneficial from it because their asset-liability sheet's liquidity is enhanced, the quality of their assets is improved and the amount is increased, and the structure of their assets and liabilities is enhanced; security markets are developed because of it; other participants are beneficial too. The financial innovation is well developed in its origin America.This essay is composed of four chapters. The first chapter is "the signification and characteristics of securitization of mortgage-backed loans". In the concept of asset securitization, "asset" is referred to those financial assets which lack liquidity but have expectable cash revenues; "securitization" is referred to a kind of technique which can create different securities with different risk, different term and different return to meet different demands from investors. It achieves this by regrouping the assets and making use of techniques of bankruptcy insulation, credit enhancement and so on; asset mortgage-backed securities is backed by the revenues of assets and can be exchanged in the market. Asset securitization is structure financing, off-balance sheet financing, credit financing and revenue-oriented financing.The securitization of mortgage-backed loans is one of the most important asset securitizations. It means that banks gather mortgage-backed loans according to similar loan amount, term and interest rate, transform it into securities and sell the securities to investors through security undertaking. Creditors can get capital before their rights are expired. It adopts principal amortisement, has low credit risk but has risk of paying off in advance.The second chapter is "the structure and kind of exchange". The securitization of mortgage-backed loans is structure financing. The key point is to create an exchangeinstitution, which has bankruptcy insulation system. The participants of exchange are initiator, servant and insurer of mortgage-backed loans, SPV, credit rating institution, investing bank and investors. The process of exchange includes: asset pool, SPV, sale of financial assets, credit enhancement, rating and sale of mortgage-backed securities, acquirement of security issuing income and payment of price to initial owners, asset management of server and taking back the return of asset on time, and principal and interest payment to investors. The securitization can be categorized into three kinds: mortgage-backed loan certificate, pass-hand securities, asset-backed securities and transfer securities.The third chapter is "macro- and micro-economic analysis". In terms of macro economy, the securitization of mortgage-backed loans can achieve scale economy, improve information asymmetry and lower the exchange cost, increase the efficiency of financial system. While in terms of micro economy, it can improve the asset structure of publisher, match bank's asset-liability term and improve the asset liquidity.The fourth chapter is "the necessity and suggestion of our securitization of mortgage-backed securities". It's necessary for our commercial banks to introduce the technique of securitization. Because we have to stimulate domestic need, to increase asset/liability ratio, and to improve the security of banking system. But since the scale of mortgage-backed loans in our country is still limited, mustered and not standard, the credit guarantee system is not...