A Study On Housing Reverse Mortgage In China-Applying The USA Experience

China has been changing to an aging society since 2000, and the recent years had hardly seen any obvious sign for this trend to vanish but keep increasing. Larger and larger elderly populations lead uptight lives without sufficient social insurance. Most of them were financially supported by their children or a little retirement pension. Some developed countries suffered such situation several years ago, so they applied new methods to overcome the difficulty. The most efficient example is the housing reverse mortgage in the USA. Therefore, we can learn from it to explore the operation of this new financial product in China, in order to ease the elderly population poverty.Housing reverse mortgage is designed for elderly populations to improve their living conditions by using home equity to take out a loan. Instead of debt reimbursement within the loan period, the borrowers could get annuities or a sum of line of credit. Until the borrowers pass away or permanently emigrate, the lenders would transfer involved home equity to loan payments, or the heirs could obtain the mortgaged property after clearing off the debts.In chapter 1, the research of housing reverse mortgage in foreign countries and in China was introduced respectively, including demand analysis, pricing model and risk control.In chapter 2, an overview of housing reverse mortgage and comparison with normal mortgage is given.In chapter 3, the reverse mortgage in the USA is discussed. It consists of the introduction of the primary products and the most popular pricing model advanced by Mitchell and Piggott,2004, which are the basement of the following research.In chapter 4, the feasibility of operation on reverse mortgage in China is analyzed. The practical significance, product demands and obstacles are involved.In chapter 5, the author designed a reverse mortgage product for China. It contains the restricted conditions of participants, risk management, and the modified pricing model. At last, the mode of operation on housing reverse mortgage is given.The last chapter is a conclusion of this dissertation, which shows the shortages of this study and how to improve in the following research.