Study on the Social Assistance Mechanism for Groups with Broken Housing Loan Payments

Based on a tripartite framework of shared responsibility among government, banks and individuals

Abstract

This paper takes the phenomenon of housing loan defaults in the process of China's urbanization as the research background, and builds an analytical framework for the social relief mechanism of government-bank-individual responsibility sharing in view of the social risks caused by the current housing loan defaults. Through case studies and comparative research, the study reveals the structural deficiencies of the existing relief mechanism in terms of responsibility definition, risk sharing and system articulation. The study finds that it is difficult to effectively resolve systemic risks by solely relying on market adjustment or individual responsibility, and it is necessary to establish a synergistic governance mechanism that includes government underwriting, bank risk mitigation, and individual credit repair. The study proposes that the government should improve the housing security system and establish a differentiated relief fund; financial institutions need to innovate debt restructuring tools and implement loan rollover preferences; and a step-by-step credit management system should be constructed for personal credit repair. Through the design of the tripartite responsibility sharing ratio model, the synergistic effect of the risk sharing mechanism in safeguarding people's livelihood, stabilizing finance and maintaining social equity is demonstrated, which provides policy reference for preventing systemic financial risks and improving the social security system.