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On the securitization of housing mortgage loan of some common sense

  It is understood that refers to mortgage-backed securities held by financial institutions themselves are less liquid but with the future cash flow of the housing mortgage loans together into mortgage group. By securitization agency purchased in cash, through guarantee or credit enhancement in the form of securities sold to investors in the financing process. This process had not been sold to investors, a lack of liquidity but able to generate predictable cash flows of assets into liquid securities in the market.
of housing mortgage loan securitization, banks ' holdings of mortgage loans into securities, and sold to investors in the capital market, banks can take that part of liquidation funds for new mortgages, so as to broaden the Bank's raising channels, expanding the Bank's sources of funds, ability to expand and enhance the Bank's assets. 90, United States 60% of housing mortgage loans per year is provided through issuance of MBS bonds. In our country, with the expansion of housing mortgage loans, the development of capital markets, and asset securitization technology, securitization of housing mortgage loans will become a main channel of China's commercial banks to raise long-term funds.
in order to alleviate the problem of insufficient liquidity of financial institutions, the Government decided to start and invigorate the secondary market of housing mortgage loans, for development and rehabilitation of housing industry opens up a new approach to funding, a move that created a far-reaching mortgage-backed securitization business. Subsequently, the securitization of housing mortgage loans from the United States spread to other countries and regions, such as Canada, Europe and Japan.
of commercial banks in China housing mortgage loan terms of up to 20 years a 30 General by instalments paid by the borrower repay the Bank loan debt. The deposit liabilities of commercial banks in China are basically, in most of the deposits is below the 5-year fixed deposits and demand deposits, do not match the duration of assets and liabilities, increased the Bank's operational risks.
of mortgage-backed securities, this "Save long short" structural contradictions will become increasingly prominent, and is likely to make the Bank into a severe shortage of liquidity, have a negative impact on economic development and social stability. Through the securitization of housing mortgage loans and illiquid loans into securities with high liquidity, improved bank liquidity at the same time, also will focus on the Bank's risk transfer, disperse to different preferences of investors, so as to realize the socialization of banking risk. BACK PAGE