Study Of The Mortgage System

Mortgaged Guarantee System was established and perfected along with the progress of reform and openning to the outside world. While during the period of planned economy, enterprise's fund came from the government, its products were allocated by government, banks arrange loans according to government's order. At that period, risk was not a problem both for enterprise and bank, so there was no base for the existance of guarantee system.Along with the transition from Planned Economy toMarket Economy,enterprises and banks all become market principals responsible for their own lose and gain. Whether a enterprise can get loans or not and the bank can collect it's loans or not became very important matters for the two parties respectively. To reduce the financial risks, banks and other financial institues adopted the ways of Mortgaged Guarantee Loans more and more frequently, so undoubtly Guarantee plays a very important role since then. The Rights of Mortgage, the King of Guarantee, was widely used in practice as its ownership and servitude to non-transferable properties. The role of Mortgage changed from traditional guarantee for creditor's rights' reimbursement and application to financial security and promote financial activities. This paper, started from the historical evolution of Mortgage System under Continental Legal System and combined with the past veins of Mortgage-Rights System in China, pointed out the trends of modern Mortgage-Rights System. Also it listed some disadvantages in China's present Mortgage-Rights System and suggestions to perfect them in order to make the system perfect and ensure better social, economical and personal activities.