| In recent years, with the rapid economic development and rising personal income, real-estate industry, as one of the mainstays of China's economy, has begun fast development under the strong government policy promotion. Being one of the basic industries of national economy, real estate is closely connected with economy, finance and people's social life. Personal housing mortgage loans have surged accounting for increasing share in total asset and new loans of commercial banks. At the same time, the risk in real-estate sector is also rising. After analyzing the present real-estateMarket and concerned of potential overheating and property bubble in some regions, the Central Bank issued Document No. 121 "The Notice on Further Strengthened Regulation of Real-estate Credits" on June 13, 2003, which is called "the most strict measure made by the Central Bank during the last 10 years". The document has caused strong response from both real-estate sector and other circles and alerted commercial banks.Since China Minsheng Bank has begun its real-estate mortgage loan business, default amount is on the rise and irregularities in lending occur from time to time. The potential risk has constrained the further development of the business. Lacking credit analysis and monitoring system and credit risk control mechanism, China's mortgage loan market is in nascent stage without systematic data and managerial expertise. The paper "The Research of Risks and Preventive Mechanism in Personal Housing Mortgage Loans" attempts to describe the causes of risks in China's personal housing mortgage loans and global best practice in risk management in the business, suggest some systematic solutions to government and banking community to the management of risks and the establishment of China's risk-prevention mechanism in personal housing mortgage loans, which are of great importance and immediate significance.The executive summary part of the paper describes the background of the subject selection, the significance and methodology of the research. After brief description of the development of personal housing mortgage loan operation of Shanghai Branch of China Minsheng Bank, Chapter 1 reveals the risk factors in personal housing mortgage loan business by demonstration of internal data of the bank and some real cases. Chapter 2 analyzes the causes of risks of the business from the perspectives of property developers, market intermediary, borrower, guarantee mechanism, real-estate market, internal risk control within banks and regulatory and legal environment. Chapter 3 introduces the best experience and practice in developed countries and China's HKSAR in managing risks in personal housing mortgage loans. Chapter 4, based on the situation of Shanghai Branch of China Minsheng Bank, suggests some measures to streamline management control system, pre-lending due diligence risk management, enforcing repayment monitoring, promotecomplementary legal and regulatory environment. The final chapter of the paper is conclusion statement.The writer, based on longtime practice and experience in managing and administrating personal housing mortgage business in commercial banks and deep investigation and consultation with relative authorities, attempts to make some highly operational suggestions on the establishment of commercial banks' risk-prevention mechanism in personal housing mortgage loans.Zhou zhihui (Business Administration)Directed by Suyu. |
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