A Research On Legal Problems Of The Securitization Of Real Estate Mortgage

The rapid development of market economy generated great demands for real estate financing and investment. As real estate mortgage is a kind of realization right which controls the value of the real estate directly, the function of circulation and investment of the real estate mortgage received attention increasingly. The best way to realize the function of circulation and investment of mortgage is the securitization of real estate mortgage. This thesis, whose subject is "A research on legal problems of the securitization of real estate mortgage", did some research on the securitization of real estate mortgage, using the methodologies of induction, deduction and comparison in legal perspective, and conceived the specific idea of how to build the institution of the securitization of real estate mortgage in our country combining the law environment of our country.This thesis includes four chapters:The first chapter expounded the essence of mortgage and the legislation orientation of the real right for security. This chapter includes two sections:the first section introduced and compared the "theory of value right" of German and Japanese scholars, and drew the conclusion that essentially, mortgage is a kind of realization right which controls the value of the real estate directly. The second section introduced three kinds of legislation orientation of the real right for security of the countries in continental law system. They are the accessory theory on the real right for security in French law, the independence theory on the real right for security in German law, and moderate accessory theory on the real right for security in Japanese law. After having analyzed the advantages and disadvantages of these three kinds of legislation orientation, this section came to the conclusion that the independence theory in German law should be the theoretical foundation and legislation orientation of the securitization of real estate mortgage.The second chapter discussed the fundamental theories of the securitization of real estate mortgage. This chapter was divided into two sections:the first section defined the securitization of real estate mortgage, and analyzed three characters of it:firstly, the securitization of real estate mortgage should be theoretically based on the independence theory on the real right for security; secondly, the substance of the securitization of real estate mortgage is to realize the function of financing and investment of mortgage through the circulation of the mortgage; thirdly, the way of realizing the circulation of the mortgage used by the securitization of real estate mortgage is to combine the mortgage and the securities technique. The second section discussed four legal characters of mortgage security: mortgage security is a kind of real right security; mortgage security has liquidity; mortgage security can be used in investment; mortgage security can make mortgage quantified and standardized.The third chapter studied the typical legislation of securitization of mortgage of the countries in continental law system. This chapter was divided into three sections:the first section studied German’s institution of securitization of mortgage. This section introduced and analyzed the theoretical premise of German’s institution of securitization of mortgage, securitized mortgage, land debt(including periodical land debt) systematically and deeply through relatively long length. The second section overviewed the background and specific institution of Japan’s legislation of securitization of mortgage. The third section compared and analyzed the institution of securitization of mortgage of German and Japan from the angles of theoretical foundation, nature of the mortgage security, public credibility of the register and legal status, and reached the conclusion that German’s institution of securitization of mortgage conforms more to the legislative purpose of the circulation and securitization of mortgage, and should be the example to our country to build the institution of securitization of mortgage.The fourth chapter built the institution of securitization of real estate mortgage of our country. This chapter was divided into two sections:the first section analyzed and commented on the present institutions and theories which are related to the building of the institution of securitization of mortgage of our country, and put forward some suggestions for improvement for the inadequacies in them. Specifically, firstly, the present legislation of our country adopted the accessory theory on the legislation orientation of the real right for security. As this theory is contradictory to the institution of securitization of mortgage, we should abandon it and adopt the independence theory on the real right for security; secondly, although civil legislation of our country didn’t adopt the theory of real right conduct, the combination of the mode that real right changes according to the creditor’s meaning and some formality and the institution of acquisition in good faith can guarantee the circulation safety of the mortgage to a certain extent; thirdly, the principle of public display and public credibility is one of the fundamental principles in real right law in our country, and this principle plays significant roles in restricting the principle of dependence of mortgage, thereby realizing the independence and circulation of mortgage, and guaranteeing the circulation safety of the mortgage. Therefore we must adhere to this principle; fourthly, the present legislation of our country adopted the principle of order promotion on the issue of mortgage’s order change. The principle of order promotion is disadvantageous to the building and implementation of the institution of securitization of mortgage, so we should abandon it and adopt the principle of order fixing. As one of the ways of realizing the principle of order fixing, the institution of owner mortgage is very advantageous to the building and implementation of the institution of securitization of mortgage, so the legislation of our country should recognize the institution of owner mortgage in many situations. The second section took German’s institution of securitization of mortgage as example and built our country’s institution of securitization of real estate mortgage combining the law environment of our country. Specifically, firstly, to establish the securitized mortgage, the parties concerned need to make a mortgage contract, register the mortgage and the special bank need to make the mortgage security according to the register of the primary People’s court and deliver it to the owner of the real estate. Generally, the mortgage investor (creditor) can acquire the mortgage only when he receives the mortgage security form the owner of the real estate. Secondly, on the side of the circulation of the securitized mortgage, as the mortgage got the form of movable property through the securitization, it may circulate according to the circulation rule of movable property, that is "agreement+delivery of securities" and it is significant for the improvement of circulation capacity of mortgage. However, the mortgage must circulate with the creditor’s right because of the principle of dependence. When the circulation of mortgage security caused the inconsistency in the content of the mortgage security and the register, the process of the transference of creditor’s right should be traced back to the original creditor who was registered according to the notarized meaning of transference. If the notarized meanings are connective and the source is clear indeed, the holder of the mortgage security is equivalent to the creditor in the register of real estate. In this situation, the content of the mortgage security has public credibility, and the transferee who is in good faith can acquire the mortgage. If the holder of the mortgage security can’t be connected with the original creditor in the register after tracing, the transferee who is in good faith can’t acquire the mortgage, even though the notarized meanings are connective and the holder holds the mortgage security.