Risk Prevention Mortgage Real Estate Law

Commercial house mortgage has been developed for a short time in mainlandChina, thus lack of experience and the system is not perfect. At the same time,because of the absence of specific legislation to regulate practice, legal disputeshappen from time to time. In recent years, commercial house mortgage businesscontinues to increase, therefore, how to avoid legal risks faced by mortgage partiesand promote the healthy development of commercial house mortgage business areimportant tasks in both theoretical and practical circles.In view of this, this paper will discuss risk and prevention in the commercialhouse mortgage. There are lots of reasons accounted for the problems existed in thecommercial house mortgage. First of all, the commercial house mortgage isintroduced by abroad and its qualitative has not been enough accurate in Chinamainland. By comparing traditional theory of the commercial house mortgage inChina and in British, this paper came to the conclusion from connotation and featuresthat the commercial house mortgage system in China mainland is a new real right.Potential legal risk can only be avoided by specifically legislation. Second, the legalrelations of the commercial house mortgage are complicated and its risk sources areabundant, presenting various forms. All parties may have potential legal risks. Forexample, the biggest risk of mortgage bank is that developers create “fake mortgage”and “zero down payments”, the risk of developer lies in buyer’s credit for if the buyercan’t meet repayment obligations, developers may undertake to ensure responsibility.For the buyers, the risk is that the purchased “uncompleted house” may become“unduly completed building projects” because of the developers’ wrongdoing.Moreover, the buyers may also lost supply because of changes in interest rate policyand finally can’t get real estate. In order to radically avoid risks of the parties, theauthor put forward several proposes. First of all, regulate the mortgage system from abroad perspective. Then bring forward targeted legal measures based on the risks ofthe parties, so as to achieve the aim of avoiding risk.