Legal Problems Of The U.s. Real Estate Mezzanine Financing

As a new source of financing for the real estate industry, the mezzanine finance isused to describe financing that fills the gap between debt and equity. It has becomeone of the major sources of financing for lenders who want to stay on the cutting edgeof creative commercial lending.This paper will be addressed to the legal issues and mechanism of China's mezzaninefinance development with reference to the relevant theories and practices onAmerican mezzanine finance in real estate financing market.The paper consists of the following parts:Part I states the origins of mezzanine finance and an overview of its recentdevelopment for a brief introducing of mezzanine finance concept.Part II clarifies the legal basis of forming mezzanine finance through analyzing of itstructure, nature, types and participants.Part III analyzes the legal elements which affect mezzanine finance and speciallyaddresses the legal issues and its applicable solution which involves mezzaninefinance.Part IV focuses on the feasibility and perspective of the local development of realestate mezzanine finance presents by analysing the existing regulation affecting Chinareal estate financing.Part V is the conclusion of the paper which stresses the author's point.