Study on Residential Mortgage Loan Credit Risk Evaluation Model-Taking a Life Insurance Company as an Example

• Main Authors: Kuang-Yang Huang, 黃光揚
• Other Authors: 郭瑞祥
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/03917557202640035270

碩士 === 臺灣大學 === 商學研究所 === 95 === Taiwan government started to deregulate Taiwan financial market in 1990. The direct finance business boomed in recent years, which reduced traditional financial institution’s loan business. In such situation, every financial institution focused on consumer loan business. Residential mortgage loan takes the major part of consumer loan business. Fierce competition occurs due to too many financial institutions. The loan quality became worse and worse. Non-performing loan ratio remains high, which erode financial institution’s profit. To well control credit risk so as to diminish non-performing loan problem is a major task of financial institutions. This research collected 381 residential mortgage loan cases from one domestic life insurance company as research samples. Among these 381 cases, 260 cases are normal payment cases and 121 cases are non-performing cases. This research selected 10 factors based on 5P loan principles, references and the life insurance company’s internal credit guideline. This research uses Logistic Regression Model to conduct an empirical analysis over the 10 selected factors and set up residential mortgage loan risk evaluation model. As a result of empirical analysis, loan amount, loan advanced ratio, annual income, total debt in financial institutions, debt-income ratio, loan tenor, collateral location, guarantor and loan purpose are distinguished. These 9 distinguished factors affect a loan to become non-performing. Result of this research may be used for the life insurance company or other financial institutions to set up their credit risk evaluation model.