Housing, Reverse Mortgages Legal Issues

"Reverse Mortgage" is a kind of financial product which enables senior citizen to raise a mortgage on their houses of their own property by asking financial institutions for a loan while reserving the right of habitation on their houses and which requires the repayment on the loan in the form of earning of selling the house only after the owner of the house moves out permanently or after his death. It is designed to solve the problems of the lack of social pension in the background of appearance of aging society in western developed countries. The emergence of this financial product on the one hand is becoming the new increasing point in financial institutions. On the other hand it does not only increases the pension of given senior citizen group but also safeguard their rights of habitation. Practice has shown that the expansion of reverse mortgage has made great contribution to improvement of life of senior citizen group and perfection of social pension system and it also has good economic returns and social effects.As China has already become an aging society, the pressure of the family support and social support for the aged is getting more and more pressing. Therefore, how to find a new and efficient model to provide social benefit to the aged is becoming a very urgent problem. Under this situation, reverse mortgage which was well developed abroad attracts the Chinese scholar's attention. In 1990s, the scholars of the country started to study the problems about reverse mortgage such as the development process abroad, the design and the operation process of the product. Recently, people began to make an attempt at reverse mortgage in practice. The healthy development of the reverse mortgage is inseparable from the guarantee of the law. However, the research in the legal issues of the reverse mortgage in our country is falling behind, which puts up barrier to its development. Therefore, research on the reverse mortgage from the legal angle has theoretical and realistic meanings.This thesis attempts to study reverse mortgage from the legal angle. Firstly, it analyzes the basic legal matter of the reverse mortgage. Secondly, it explores the economic returns and social effect targets of reverse mortgage. Thirdly, it designs the legal framework of the reverse mortgage. Lastly, it includes three parts to explain the legal framework of the reverse mortgage. In part one, it discusses the market subject of the reverse mortgage. In part two, it discusses the legal issues in the market operation of the reverse mortgage. And in the part three, it discussed the government intervention to the reverse mortgage. I hope to provide some legal thinking for the development of the reverse mortgage in China.This thesis consists of six parts:In part one, I analyze the basic legal matter of reverse mortgage, revealing the definition, the characteristic and its legal relationships. Firstly, I introduce the definitions abroad and summarize the definition of the reverse mortgage myself. Secondly, I discuss the characteristic of the reverse mortgage such as the particularity of borrower, the particularity of mortgage, the retention of ownership, the retention of habitation, the particularity of the repayment and without recourse. Thirdly, I discuss the legal relationships of reverse mortgage.In part two, I analyze the economic returns and social effect as two objectives of reverse mortgage. While analyzing the reasons to insist these two objectives, I also discuss how to carry out these two objectives in reverse mortgage. I hope that the design of the reverse mortgage's legal framework can carry out these two objectives.In part three, I discuss the legal framework of the reverse mortgage. I put forward the legal framework of the reverse mortgage in our country by analyzing the legal framework of the reverse mortgage in the USA. The constitution of the reverse mortgage's legal framework in our country should include six parts. Firstly, regulation of debtor-creditor relationship of reverse mortgage by contract law; secondly, regulation of mortgage relationship of reverse mortgage by property law and guarantee law; thirdly, regulation of market subject of reverse mortgage by company law; fourthly, market operation regulation of reverse mortgage; fifthly, the duty of supervising and managing of the relevant government sectors by law and regulation; sixthly, perfection of relevant service system of reverse mortgage.In part four, I discuss the market subject of the reverse mortgage. This part is one of the explanations of the reverse mortgage's legal framework. Firstly, I discuss the qualification, rights and obligations of the reverse mortgage's borrower. Secondly, I discuss the qualification, rights and obligations of the reverse mortgage's lender by analyzing the lender of the reverse mortgage abroad. Thirdly, I analyze other institutions involved such as insurance company, society security organization and agencies.In part five, I discuss the legal issues in the process of the reverse mortgage. This part is second explanation of the reverse mortgage's legal framework. Firstly, I discuss the market access system of the reverse mortgage including market entrance conditions and market entrance procedure. Secondly, I discuss the market withdrawal system of the reverse mortgage including the market withdrawal conditions and procedure. Thirdly, I analyze the legal obstacles in the process of the reverse mortgage including the obstacle in financial segregated management, the obstacle coming from the land ownership system and the obstacle from the lack in credit system. And then I put forward some measures to clear away the legal obstacles.In part six, I discuss the government intervention in reverse mortgage. This part is third explanation of the reverse mortgage's legal framework. Firstly, I discuss the government intervention in reverse mortgage abroad to show the importance of the government intervention in reverse mortgage. Secondly, I put forward that the government intervention in reverse mortgage should include several aspects. The first aspect is to establish and perfect policies and regulations of reverse mortgage. The second aspect is to supervise the market of reverse mortgage. The third aspect is to provide auxiliary services for reverse mortgage. The last one is to guarantee the extraneous risks of the reverse mortgage.