The Legal Mechanism For Risk Prevention Concerning Housing Consumer Credit

Housing consumer credit as a new business tool under present social and economicconditions has already become the mainstream of the domestic housing consumption and amain funding source for the real estate industry. Pushed by a surging market demand andsubstantial volume in both profit and turnover against low operation cost and simplicity inprocedure, many commercial banks rush to this business. However, China’s housing consumercredit business, with its relatively low development and immaturity, is still facing many riskssuch as the loss of market credit, lack of both regulation and sound legal regime, as well as ashortage of the in-bank risk prevention and control mechanism, etc. Therefore, it is necessaryto carefully comb these problems as so to find ways to an effective legal mechanism for riskprevention concerning housing consumer credit. Such considerations formed the base ofthought while the author was writing the paper.The whole text of this paper is divided into six parts:The First Part-"Introduction", from the perspective of the housing consumer creditmarket, explores the theoretical value and practical significance of the legal mechanismfocusing on the risk prevention during housing consumer credit by commercial banks. It alsointroduces the status of the domestic and foreign research, the emphasis, methodology andinnovations of study.The Second Part-"Overview on the risks in housing consumer credit by commercialbanks" discusses the connotation of housing consumer credit, and analyzes the main risks thebanks face, particularity on the special features of those risks, which could serve as afoundation for the following analysis.The Third Part-“Analysis on current situation of China’s Legal mechanism for riskprevention in housing consumer credit”is divided into two sections. The first section discussesthe function and highlights the importance of risk prevention during housing consumer credit.The second section analyses the defects in China’s legal mechanism, from which all the risksof commercial banks during housing consumer credit can be traced, e.g. the imperceptivenessof inquiry system, lack of sound laws and regulations, as well as weak internal control,prevention and imprecision etc.The Fourth Part-“Foreign cases of risk control and prevention in housing consumption credit and lessons for China".analyzes two typical cases of both US and Japan, and comparesthem with China’s current situation, trying to arrive at some common conclusions forenlightenment in thinking.The Fifth Part-“The improvement of the Legal mechanism for risk prevention duringhousing consumer credit” tries to explain thoroughly the improvement of the legal mechanismfor risk prevention from five aspects.The Sixth Part-"Conclusion" while further emphasizing the importance of theimprovement of the legal mechanism for risk prevention during housing consumer credit,states the addressing of the above problems is not an overnight action but needs constantefforts.