Chinese Commercial Bank Individual Housing Mortgage Loan Risk Prevention Research

Our country commercial bank real estate mortgage business mainly includesdevelopment enterprise mortgage loans and individual mortgage loan, this articlemainly on personal mortgage loan risk prevention research. Personal mortgage loan isin1997, with the rapid development of China’s real estate industry and housingsystem reform and financial system reform of promoting and gradually arisen, eachbig commercial Banks in China are racing to develop individual mortgage loanbusiness and regard it as a high quality and to develop new profit growth point. Withthe development of such business to expand, its risk is becoming more and moreprominent in recent years.This paper analyzes the individual mortgage loan risk, from the three main risks,namely, borrowers, commercial Banks, the government supervision of the causes ofrisk, and draw lessons from the us subprime mortgage crisis brought about by theexperience and lessons, and put forward prevention measures of China’s commercialBanks personal mortgage loans.The first part of this paper is introduced the selected topic background, purposeand meaning. Due to cancel the welfare housing distribution policy of housing systemreform in our country, monetizing housing, the housing belongs to a large consumerproducts in the consumer, the income level of residents in accordance with the currentbasic cannot afford, so the bank personal mortgage business. Due to the stability andhigh profitability of personal mortgage business, the proportion of commercial Banksto carry out such business is becoming more and more big, the real estate bubble inChina increase and the influence of the us subprime crisis, how to prevent, identify,control and management of personal mortgage loan risk has become a commercialbank is the most important and urgent problem at present.The second part puts forward the cause of personal mortgage loan risk, from thedefault risk of the borrowers and the way of commercial Banks to control risks andflaws of the law and so on three aspects to elaborate. The third part mainly reviews the causes of the us subprime mortgage crisis. AsAmerica’s housing market continued to cool and increasing interest rates, making a lotof bad credit borrowers and subprime borrowers due to the increase of interestrepayment pressure increases, began to appear the possibility of default. Borrowersunable to repay the face prices suddenly down again at the same time, the bank foundthat even if the sale is not enough to make up for the loan and interest, even cannotmake up for the loan itself. This bank on this loan business will not collect their loansand interest, will be a loss. When the emergence of this phenomenon of mass largerange, and the borrower is bad credit subprime borrowers, thus resulting in a largenumber of borrowers can’t pay off the loan, the subprime crisis. The large outbreak ofthe subprime crisis not only the U.S. financial industry and the whole nationaleconomy cause bad influence, and even affect the world a number of countries,including China, the economic operation, the personal mortgage loan risk preventionand control of real estate in our country gave a very profound inspiration and lessons.The fourth part puts forward some countermeasures for preventing the risks ofindividual mortgage loan of real estate in our country and the suggestion. To establishand perfect the commercial Banks internal regulation, the key is to establish personalmortgage loan of personal credit evaluation system. Two personal mortgage loanpossible credit risk, liquidity risk, collateral risk, etc. Put forward the correspondingpreventive measures. Before three perfect commercial bank credit, loan, loan after theinternal control management system. Four give full play to the functions of thegovernment, through establishing and perfecting the social security system andmeasures to carry out real estate mortgage securitization, risk transfer of commercialBanks, such as the personal mortgage loan insurance system, to the bank as thebeneficiary, requiring Banks to the person that buy a house/developers burden of theproportion of insurance fees in accordance with the relevant provisions, for highquality borrowers can consider to return premiums that borrowers with good credit, sothe borrower and developers with a variety of reasons not to perform its obligations,may be required to insurance company assume insurance responsibility, as arepayment guarantee, etc.