The Securitization Of Housing Mortgage Loan Risk Prevention Research In Our Country

Mortgage-Backed Security is a new structure of financing, and it is one of the greatest financial innovations in twentieth century. With the improvement and development, Mortgage-Backed Security has become the fastest growing and most dynamic financial instruments in the capital market. Mortgage-Backed Security mainly means that the financial institutions pack a group of home mortgages with illiquid, but can produce steady cash flow in the future to form the pool of mortgage assets and sell to other financial institutions or other specific purpose institutions. And then, with guarantees and credit enhancement, asset-backed securities are sold in capital market.At present, mortgage-backed security in foreign countries develops better. Just started in China, commercial banks should learn from that and use h mortgage-backed security to get rid of the poor plight of China’s commercial banks liquidity, and promote the entire financial market development. In2005, China Construction Bank issued the first housing mortgage loans securitization trust products:Jianyuan2005-1personal housing mortgage loans securitization trust the priority of asset-backed securities, there has been substantial of exploration on securitization of housing mortgage loans. Mortgage-backed Security in China played a significant role in promoting China’s economic development. However, the mortgage-backed security with other financial instruments, like a double-edged sword, it can bring benefits to economic development and also brings great risks in this process. This paper will analyzes and explains the risk of default and the risk of prepayment.On the basis of summing up the present situation of mortgage-backed securities research at home and abroad, this paper introduces the basic theory of the mortgage-backed securities、participation and basic processes, and analyses the major risks faced by the mortgage-backed securities:risk of default and the risk of prepayment. Through the empirical analysis of Jianyuan2007-1personal housing mortgage-backed securities put forward policies and proposals to guard against these risks.