The so-called securitization of housing mortgage loan refers to a financing method that combines the mortgage assets held by the housing mortgage loan company into a mortgage loan portfolio and sells it to investors as securities after guarantee or credit enhancement. Generally speaking, mortgage issuers sell their loan assets to government mortgage companies or private investment banks, then they package and reorganize these assets, and then sell these debts to other investors in the form of securities. "marketable securities" refers to bonds, not stocks, whose essential feature is to support their payment with the cash flow of mortgaged assets, so it is also called mortgage-backed bonds. When the stock is sold, the stock holder becomes the creditor of the mortgage loan and gets the payment through the provider of the mortgage-backed securities.
What are the advantages of mortgage securitization?
(1) This is conducive to expanding the financing channels of China's commercial banks. Securitization of housing mortgage loan is to turn mortgage loans held by banks into securities and sell them to investors. By converting these cash into cash, banks can broaden financing channels, expand sources of funds and increase the scale of assets by issuing new housing mortgage loans. In the 1990s, more than 60% of mortgage loans in the United States came from MBS. In China, with the expansion of credit scale, the continuous improvement of capital market and the continuous maturity of asset securitization technology, real estate mortgage loan will be an important financing method.
(B) This is of great significance to reduce the operational risks of commercial banks. At present, the mortgage loan of commercial banks in China can reach 20-30 years at most, and borrowers usually use installment payment. However, China's commercial banks are mainly various types of deposits, characterized by time deposits and checks of less than five years. The maturity of assets and liabilities does not match, which increases its operational risk. With the continuous expansion of the scale of housing mortgage loan business, its proportion in the whole bank has been increasing.
The structural contradiction of "short-term deposit and long-term loan" will become more and more obvious, which will lead to the shortage of bank liquidity and have a negative impact on economic development and social stability. Converting loans with poor liquidity into securities with high liquidity can not only improve the liquidity of bank assets, but also transfer the risks concentrated in banks to different investors, thus socializing the risks of banks.
(3) It is of great significance to improve the profitability of China's commercial banks. Mortgage-backed securitization can not only broaden financing channels, but also increase the liquidity of bank assets and bring new profit growth points to banks.