China's Housing Mortgage Loans Securitization Legal System

The Mortgage-backed Securitization is the international tidal current and tendency which has appeared since the 20th century 70's. As the initial and typical form of Assets Securitization, the Housing Mortgage-backed Securitization (MBS) has aroused great interest in every country. Since the housing system innovation of our country, the housing mortgage loan proportion raises year by year. In order to reduce the risk of the bank, breakthrough the finance bottleneck limit of real estate, it is imperative to acceleration the finance industry innovation in real estate field. According to our country's MBS legislation and experimental practice, this article has analyzes the legal barriers MBS meets during its operation process. On this basis, through comparing and drawing lessons from the legislation pattern in the US, this thesis put forward the legislation proposal on how to establish our country's legal system which takes protection of the investor benefit as the core. This article is divided into five parts, specifically as follows:The first part is the basic part of this article; it mainly elaborated the general principle of residential mortgage-backed securitization. In the process of the Housing Mortgage-backed Securitization, the housing mortgage loans have been transformed into the Mortgage-backed security. The Housing-backed Securitization has formed a mature operation flow that the multitudinous organization participated. It has all sorts of complex legal relationship in the transaction overhead construction .Beginning from the MBS's implication, this part combed the legal relationship during its operation process, and simply introduced the emergence and development of MBS at last.The second part is the system foundation partial. This part mainly introduced three foundational systems of the MBS--- housing mortgage loan system; the system of Assets Securitization and Real estate entrusting system. On the basis of legal explanation to the concepts of three systems, this part emphatically analyzed their utilization in the MBS operation process as well as their relations with the MBS.The third part concerned the establishment and the practice of the MBS legal system in our country. All sorts of theories discussion is for the utilization of MBS in our country. Analyzed the general principle of the MBS in the front article, we have known that the current foundation system of Housing Mortgage-backed Securitization has been perfected in our country. And it is the right time for introducing the Housing Mortgage-backed Securitization into our country. Then ,this part introduced the MBS legal system in our country, pointed that the special purpose trust was a reality choice under present legal frame in our country, and analyzed the MBS's operation characteristics as well, on the basis of studying the necessity and the feasible of carrying out MBS in our country.The fourth part discussed the legal barriers which MBS meets under our country's present law frame. This part mainly elaborated three legal problems: First is the legal barrier existing in the risk isolation. The risk isolation which directly relates investor's benefit is the most important question of the MBS, Therefore this part carried out the detailed analysis to the legal barriers we met when performing really sold, constructing of SPV. Second is the legal barrier happened when credit enhanced. It mainly introduced the legal barrier existing in the methods used in the credit enhancement in our country. It is directly affecting by the credit enhancement for the housing mortgage-backed securities' credit rank and investor's confidence. The follow part analyzed the legal matters in the MBS movement environment.The fifth part is the conclusion of this article. The legal conflict and the legal barrier caused by the legal flaw can only be solved by legislation. So the author put forward the legislation proposal on the basis of our country's condition together with drawing lessons from the successful legislation experience overseas. The author put forward these legislation proposal under the current environment: our country must establish the system in which the housing mortgage-backed securitization's development is supported by our government; we should revised the law related to the Housing Mortgage-backed Securitization; we should formulate the special laws of Assets Securitization too; and we should consummated the necessary measure related to the Housing Mortgage-backed Securitization, then our country should establish the legislation system which takes the investor's benefit protection as the core in order to create a better legal environment for MBS's operation.