Abstract:

The Turkish society that settled for centuries ago has always worked to acquire a nice place for living. This place is long considered to be a house where all family members live together. In the ancient times houses are soleley needed for protection but nowadays houses are places where people waste most of their lifetime. After the earthquake in 1999, the importance of construction quality of houses are better understood by all people in Turkey. However, this consideration has sharply shifted the costs of constructions. On the other hand, the high inflation level in Turkey in the last 30 years has kept the Turkish people away from possessing a place for living. The recent years the inflation rate came down to single digits and hence manipulated the demand for housing and hence for financing. The Mortgage Law was approved in March, 2007 by the Turkish Parliament. This law encourages securitizations of mortgage loans in the best advantage of the financial system and the borrowers. This first section of this research contains the summary of mortgage law and a diagram showing the flow of the underlying law. The next section contains an application of a housing loan under the new law. Later, a model is suggested for securitization of mortgage loans. The final section, all findings are restresed.

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