Risk Analysis And Insurance Design For Housing Mortgage Loan In China

Housing mortgage has become an important one area for commercial bank tooffer loans.Its amount is large and time is long,Which doesn’t effect it to be the newgrowth point for commercial bank’s loan business. Generally, in order to reduce risk,commercial banks will require the owner of the house to buy personal mortgagehousing insurance, but this model didn’t last long and was terminated for a series ofproblems.This article divides housing mortgage losses into unwilling default loss andwilling default loss, and generally, unwilling default loss has something to do witheconomic cycle, in data it will follow some statistics rule.Willing default loss can bedivided into default loss due to prepayment and default loss due to not paying(including paying part)at due time. Via the model of mortality of actuarial science,we can get the unwilling default loss, using the First Passage-a model of Copulafunction we get the loss due to prepayment, by B-S model we get the default loss dueto not paying，finally，three different interests are given.Microeconomicly, mortgage weighted (guide) rate is given, take liquidity riskand other risks as adjustment factor, the total variance before and after adjustment areequal theoretically, the curve equation provides a readjustable region. Marketequilibrium interest rate is figured out by simultaneousness that the preference isfunction of adjustment factor.Macroeconomicly, by considering all the factors and their weights in an equation,a formula similar to B-S model is found. Furthermore，a contract interest rate isobtained via using Bayesian posterior distribution method on the condition that thepricing rate is linear to directed rate and with the policy distribution parameter asprior information. Based on the ratio, contract interest rate divided by pricing interestrate, the reasonableness of the contract interest rate is clear, preliminary analysisindicates that when the ratio near to1is relatively reasonable.On these theoretical basises, this paper will design housing mortgage insurancepattern for universal insurance and property insurance for example, that is commercialbanks transfer intentional default risk to insurance company, owner purchasesproperty insurance according to losses calculated, and the owner also must buyuniversal insurance, according to the commercial bank interest rate curve after deducting unintentional default risk, the premium of insurance company increases,the owner of the reimbursement pressure reduces, the default preference decreases.