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An Empirical Study of the effects of the mortgage loan guarantees

Author: HeZiLi From: www.yourpaper.net Posted: 2007-11-19 22:49:38 Read:
Abstract: China's poor social credit environment, the rapid development of the mortgage, but the actual effect is influenced by many factors. The design of this article, the core set of indicators to measure the actual effect of the mortgage loans, a sample survey of the actual effect of the mortgage, through empirical studies, preliminary analysis of the key factors affecting the practical effect of the mortgage, put forward policy recommendations.
Keywords: mortgage loans; asymmetric information; guarantee; effect

Introduction
The collateral is the debtor or a third party does not transfer possession of the property, the property as a security for debt. If the debtor defaults, the creditor is entitled to the property auction or in accordance with the provisions of the Guarantee Law, the sale of the property price priority for repayment. China's Commercial Bank Law "clearly commercial banks to develop credit business should implement the guarantee. The mortgage is an important way of security.
The role and status of mortgage loans, there are a lot of exposition. When the information asymmetry between borrowers and lenders, mortgages and guarantees not only help solve the adverse selection faced by the bank, but also conducive to the borrower to avoid bank credit rationing (Stiglitz & Weiss, 1981, 1986; Besanko ; & Thakor, 1987; Hong Lan, Mu indisputable Press, 2004). Apply for mortgage loans to increase the company's owners / managers personal default costs and improve the borrower's incentive to perform the contract (Inwon Song, 2004).
The rapid development of China's mortgage. According to the survey of the Chengdu Branch of People's Bank of the joint investigation team of 10 at or above the county level agencies of the state-owned commercial banks in late 2000 loans, credit loans accounted for 28.58% of the outstanding loans, secured loans accounted for 71.42% (41.45% of the mortgage) ( Douguang Han, Liu Yu, 2004).
How to measure the effect of the actual guarantee of the mortgage? Mortgage widespread actual guarantee? The main factors of the actual guarantee effect how? In this paper, empirical research methods preliminary study and make policy recommendations.
Research concept set
1 Research
Abroad, study abroad empirical studies have shown that, can sell the collateral in the loan recovery process repayment, collateral for a loan to improve the level of loan repayment, higher loan recoveries (Carty, 1998; Gupton et al, 2000; G. Kabance., 2001; K Emery., 2003; J. Franks, A de Servigny, S Davydenko, 2004; J Grunert, M Weber, 2005). From multi-country data comparison, the collateral on the loan recovery rate, due to the bankruptcy law and creditor rights, different types of collateral, collateral valuation methods and reappraisal frequency showed a significant difference; macro economic conditions have a significant impact to the realizable value of the collateral (J. Franks, A de Servigny S Davydenko, 2004). Franks et al study the factors affecting the recognition, but did not affect the size of the quantitative estimates.
Domestic research within the mortgage research articles using qualitative analysis, citing the inductive method. Research literature focused on the problems of induction (Chris Wang, 2002; involved in 2004; Wangguo En 2004 ;), collateral valuation quality (deer Asia Qin, 2003), the assessment of the registration fee (the Ye Chunmao Hu Yousheng, Ye Xiangdong, 1996; Li Ruili, 2000), the collateral type choice (Zhu Jianhua, Yangxiaorong, 1997), the restrictions of the repossessed assets (Chunling, 2004), fast cash limit (Fengchao, 2004; Left Liying, 2005) lack of statutory liquidation order (Wang Guoen, 2004), collateral bankruptcy repayment rate is low (Shanghai Higher People's Court, 1998; Jun Sui, etc., 2002; Sichuan Provincial Government the Economic Restructuring investigation group, 2003). systems empirical research literature on the effects of collateral guarantees.
2 concept set
The name of the mortgage guarantee rate: = the assessed value of the collateral / mortgage amount, the reciprocal of that bank is usually referred to "mortgage discount rate."
Mortgage guarantee rate: the disposal of collateral net income / mortgage amount, this paper, which is defined as the actual mortgage guaranteed rate, and the indicators to measure the effect of mortgage guarantees.
Loan recoveries: = 1 - loan loss rate
The net realizable value of the assessed value of the collateral is realized rate: = collateral / collateral appraised value * 100%

, methods and conclusions
(A) sample processing
This study uses the the mortgage banks disposing archives, a total of loans arrived in Guangdong Province (pledge) material to dispose of 1,799 valid samples, the amount of the loans involved 7.09 billion yuan, covering the local various industries and regions; loan 1984-1999 years Loan Mortgage processing time 1995-2002, the collateral realized from 1996 to 2004.
In order to improve the accuracy of the analysis, the data were as follows cleaning process:
1, excluding the invalid mortgage data.
2 verify correction of abnormal data: (1) the exclusion of the data of the loan amount is less than $ 30,000 in the original data; (2) the actual guarantee rate greater than 400% of the data carried out a door-to-door verification.
The samples table below:
Table 1 sample list of the basic situation
Variable sample sizes mean standard deviation of 25% 50% 75% Minimum Maximum
Actual guarantee rate (%) 1799 48.88 43.55 16.00 36.50 76.40 -10.50 333.33
Assess the value realizable ratio (%) 1799 39.84 38.99 12.92 28.99 56.60 -57.50 375.00
Financing amount ($) 1799 395.01 986.08 33.20 102.00 335.00 3 17.64 thousand
Disposal of time (months) 1799 54.14 31.55 29.00 48.00 72.00 0 180
Disposal cost rate (%) 959 20.45 21.78 5.77 12.31 27.78 .19 144.93
(B) the main conclusions:
1, the actual guarantee effect of the sample population does not follow a normal distribution, skewed bimodal distribution, the distribution histogram as follows:

Actual guaranteed rate of an average of 48.88% guaranteed average ineffective; standard deviation of 43.55%, the effect of fluctuations, poor stability; distribution of concentrated obvious to the low-end (10-20%) and high (100%), display most poorly, the effect of a small part of; distribution showed a bimodal distribution, there may be some kind or some of the systemic effects of factors.
2, assess the quality of basic presentation concentrated to the low-end of the beta distribution characteristics, assessment of poor quality, have a significant effect on the assessment of the quality guarantee effect.
From the bank point of view, the assessment of the quality (assessed value of realizable ratio) ideal distribution should be a mean value greater than or equal to 100% of the normal distribution, and the smaller the standard deviation, the more stable quality assessment.
Realization of the assessed value of the ratio of the actual distribution as shown below:

From the graph, the distribution of basic obedience distribution, the lower and the higher the ratio of samples to assess the value realizable ratio, the realization of the assessed value of the ratio of the mean of only 39.84%, the assessment of quality is far from ideal.
Further assessment of the quality and guarantee the quality of the relationship between the Pearson correlation coefficient was 0.545, two-tailed significance test coefficient is 0.000, data show that both the existence of a significant correlation.
3 handling time presents approximate normal distribution, no obvious correlation with the actual guarantee effect
As the distribution of the disposal time, showing approximate normal distribution with mean of 54.79 months and a standard deviation of 32 months. Disposal of a long time, on the one hand, is imperfect as part of the collateral property rights, on the other hand the 1999 disposal of the low level of market development collateral.
Disposal time length and the actual guaranteed rate of correlation analysis, the data show, the two sides related to the relationship between significant assumptions can not get support (the Pearson correlation coefficient to -0.006, two-tailed significantly with sex test parameters to 0.806), and that from the empirical data to see, can not be considered disposal of time is an important factor of the effect of the actual guarantee.

4, the relationship of the loan amount and the actual guarantee effect data support
The amount of financing with the actual guaranteed rate carried correlation analysis, the data show, the two sides related to the relationship between significant assumptions support (the Pearson correlation coefficient to -0.123, two-tailed significantly with sex test coefficient to 0.000), that is, from the empirical data to see, the amount of financing is the actual guarantee of the important factors of the effect, a negative correlation between the two sides. Actual guaranteed rate of large loans secured on the whole lower than the actual small mortgage guarantee, the large amount of collateral assessment more difficult to assess the more vulnerable to borrower three significant amounts of collateral Small collateral compared the narrow market demand side and harder realizable.
5, the rate of disposal costs presented beta distribution characteristics with actual guarantee effect relationship to obtain data to support
As the distribution of the costs of disposal rate, showing the the beta distribution characteristics, an average of 20.45%, a standard deviation of 21.78%. Because the beta distribution characteristics of the data, the rate of disposal costs were mainly concentrated in the 15% range (less than 12% accounted for 50% of the data), disposal costs higher rates, mainly small collateral allocated land .
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