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Guarantee
Credit Guarantee by a guarantee company designated by lender is generally required In case of default, lender can quickly recover the unpaid balance Borrower pays guarantee fee up-front or together with interest payment Guarantee fee may vary subject to borrowers credibility
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Amount
Two considerations 1. Multiple of borrowers annual income 2011 averages of FLAT35 program under JFH New apartment: x 5.9 New house: x 6 New house with own design: x 5.2
2. Repayment ratio
annual repayment of Principal & Interest/annual income < 25%35%
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In case of Non-performing
Long time past due or personal bankruptcy
Guarantee Company repays to Lender Guarantee Company forecloses the mortgage Life insurance pays insurance for repayment (death or health problem) Voluntary sale of the property Extension of term
Relocation loan
Financing the difference of loan balance and sales value of old house, plus value of new house
by Government Agency 2007 Japan Housing Finance Agency (JHF) was established in 2007 to succeeded GHC JHF buys and securitizes banks mortgage loan assets and provides banks with long term funds JHF directly provides handicapped/weak borrowers with mortgage loans that commercial banks cannot provide FLAT 35
Fixed interest rate with term of 35 years No guarantee needed No fee for prepayment Possible to apply for refinancing and purchase of second house Life insurance is not mandatory Applied only for technically qualified houses and apartments Minimum term is 15 years. 10 years for aged 60 and above
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BTMU Variable 0.875% 5 yrs 1.000% 10 yrs 1.350% 15 yrs 2.600% 20 yrs 3.150% 21-25 yrs 2.320% 26-30 yrs 2.400% 31-35 yrs 2.440%
SMBC RESONA Variable 0.875% Variable 0.875% 5 yrs 1.000% 10 yrs 1.350% 5-20 yrs 1.810% 11-15 yrs 2.100% 16-20 yrs 2.290% 21-35 yrs 2.440% 21-35 yrs 2.020%
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Borrower
Banks loans
Investors
proof certificate
custody
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Mongolia/MIK structure?
Borrower Banks loans MIK pass through Government gov. bond
Borrower
Banks loans
Investors
proof certificate
custody
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Thank you
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Disclaimer
This presentation has been prepared solely for informational purposes and its not to be construed as a solicitation or any offer to buy or sell securities, commodities, or related financial instruments. Norihiko Kato has prepared this presentation based on information available to it, including information derived from public sources that have not been independently verified. No investment, divestment or other financial decisions or actions should be based solely on the information in this presentation. Norihiko Kato accepts no responsibility in relation to this presentation, and shall not be liable for any loss or damage whatsoever suffered by any party arising from, relating to, resulting from or based upon the use of this presentation and any errors or omissions there from.
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