| Summary: | 碩士 === 國立臺北大學 === 地政學系 === 91 === In addition to traditional foreclosure, many other methods of resolution for residential mortgage defaults are available in Taiwan by lenders to dispose of borrowers’ collaterals, largely residential properties. It however appears that the choices of default resolution alternatives among lenders differ. This research, using questionnaires and face-to-face interviews, examines the behavior of lenders in making decisions in respect of resolving mortgage default. We use two criteria of resolution time and recovery ratio to measure effectiveness of each alternative. The results indicate that a large proportion of lenders prefer foreclosure which consumes more time and recover less debt than any other alternatives. This finding seems to contradict what we would normally expect. We also uncover important factors which likely affect lenders’ choices; they are costs of legal environment, cycles of the property market, realiability of property valuation, borrowers’ attitude towards solving mortgage default and administrative costs. This research also proposes six ways to improving the resolution of mortgage default; they are more exchanges of experience between banks, allowing banks to deal with defaults unilaterally without borrowers’ prior agreement, reducing banks’ proportion of allocated costs, establishing a fair mechanism of property valuation, improving the quality of court services and finally setting up a special sector in banks responsible for default resolution.
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