Jingle Mail Boom in Zhejiang and Jiangsu

Article summary: Home buyers are turning banks into landlords due to an inability to repay mortgages, along with a lack of confidence in the market that's causing investors to cut their losses. In several cities such as Hangzhou, Wuxi, Ningde and Xinyi, banks have been suing homeowners for failure to pay the mortgage. There isn't enough data to call this a widespread phenomena, but regulators are sounding the alarm.

In Nanjing, one state owned bank branch manager said he hadn't seen any similar situation in his city, but the past due rate and past due amount is rising. He said the bank will have a lot of pressure in the second half of the year. He went on to say that home owners are complaining after a small drop in prices, but the big drop hasn't come yet. Small companies that buy large and luxury properties are expected to be the greatest source of bad debt. Later in the article, a property agent explains that property investors want to get the pain over with and cut their losses.

A big reason for the increase in jingle mail is the price of the home falling below the mortgage. The house becomes negative equity and the desire to repay the mortgage declines. Banks also failed to enforce strict credit standards, often relying on income alone which could be easily faked. (So China has liar loans too...)

The article closes with a lawyer explaining that if it goes to court, the home will be auctioned. If the sale price exceeds the outstanding principal and interest, excess proceeds will go to the homeowner. If the auction price is exceeded by the debt, the court will go after the homeowner's other assets.

房价下跌银行“被房东” 苏杭惊现“弃房断供”
Property boom did not improve, there have been cities relaxation " restriction ", individual owners have begun to lose confidence in the" abandoned house off for. "

Recently, the 21st Century Business Herald exclusive that five or six at the end, Zhejiang, Hangzhou , Wuxi, Jiangsu, Fujian Ningde, Xinyi, Jiangsu and other places have owners for personal and mortgage loans overdue by banks prosecution cases. These cases, the owners are mostly claiming that "inability to pay."

There is no more data, "abandoned house off for" has become a common phenomenon in the country. However, the regulatory authorities have already made warning.

Some media reported that on May 12, central bank vice governor Liu Shiyu chaired a housing financial services symposium to discuss the current differential housing credit policy. Conference information revealed that, in order to prevent buyers because of falling house prices and foreclosures, the central bank requires banks to give priority to housing loans.

And two weeks ago, China Banking Regulatory Commission Chairman Shang Fulin in the first half of the banking supervision and management of the economic and financial situation analysis conference and meeting also said that "housing prices in some areas have emerged even breach the owners, some of the small room rate of capital chain tension, credit risk associated with the four-tier cities need attention. "

Hangzhou branch of a stock line who believes that one of the more serious phenomenon just abandoned house foreclosures, falling house prices have comments after the owners very much, some developers will be under pressure to give some compensation measures, such as grants parking or return of some renovation money.

Owners claiming "inability to pay"

21st Century Business Herald reporter learned that, headquartered in Hangzhou, a stock line in Guangdong West Branch recently sued three of the same real estate owners, there are individual housing mortgage loans in default. Their houses were purchased Hangzhou Kunlun Real Estate Development Co., Ltd. (hereinafter referred to as the Kunlun capital) developed a "mansion" named luxury real estate.

Verdict shows that in 2010 the bank to the owners of a certain chapter 3.1 million yuan in loans for the purchase of the house, 20-year loan term, loan interest rates go up 10% for the benchmark. To house the establishment of collateral, and require developers to guarantee the Kunlun bear joint responsibility of all.

After the loan, it fails to Chapter certain agreed period since September 21, 2013 to repay the principal amount, as of November 2013 the outstanding principal amount of 2.88 million yuan of bank loans, interest of $ 50,000. CHAPTER certain defaults, the bank will announce the loan early maturity, and taken to court. March 2014, Xihu District Court accepted the case.

The other two cases the bank sued the owners are Huang Moumou and Moumou. That is, at least in the real estate they purchased two more houses. Time buyers are prices higher in 2010, the amount of 3.23 million yuan loan term is 15 years, respectively, and 30 years. Owners will not have to repay since September 2013 and December.

Owners respondent said in court, "the fact that no objection to the borrower, the current inability to repay. Moumou has paid more than three years of interest, the bank then liquidated damages claim unreasonable hope Kunlun able to fulfill the responsibility to ensure the return to the bank loan, and then returned to the house purchased Kunlun are. "

Accusing him of a state-owned Nanjing is also a governor of the 21st Century Business Herald said frankly, "There has not been a similar situation in Nanjing, but the amount of overdue loans overdue rates and rising. pressure in the second half of our lot!"

The governor said, "There are real estate prices, some owners complained, but the crash has not yet. Small and micro business owners are buying the big house and villa estimated to be the main future adverse, but there are some business benefits not just need to lenders . "

People a stake in Hangzhou branch line but that one is just more serious phenomenon abandoned house foreclosures, falling house prices have comments after the owners very much, some developers will be under pressure to give some compensation measures, such as gift parking or return some renovation money.

Hangzhou is not the case.

As mentioned at the beginning of this article, there are multiple Xinyi City, Jiangsu Agricultural Bank [0.00% funding research report ] to prosecute clients mortgage default case, involving different real estate and developers. For example, ABC Xinyi City Branch in June 2010 loans 420,000 yuan to buy a couple Han Kang and a total price of 600,000 yuan of housing, including the down payment money for 160,000 yuan, the loan interest rate is 4.75%, loans period of 20 years. As of June 2014, the borrower has overdue 3, the outstanding principal amount of 3.86 billion yuan of bank loans, interest 23,000 yuan.

Earlier media reports have said that in a highly developed private finance Wenzhou, as of late July 2013, various kinds of "abandoned house" Case 595 cases, the adverse balance of mortgage loans 412,770,000 yuan. Which, due to personal housing mortgage loans off for a "abandoned house" 15 cases; due to operational difficulties can not repay the loan, while a mortgage "abandoned house" has 580.

The total price is lower than the loan principal and interest?

In these reports, such as for example in Huang Moumou, according to 2010 bank lending rates go up 10%, 30-year loan to calculate the total amount of 3.23 million yuan, the total amount of the loan principal and interest repaid to the lender needs to 7.545 million yuan, of which 4.315 million yuan of interest .

When the reporter asked the identity of buyers, an employee Hangzhou chain of family property, said, depending on the size and the floor above the current price of about 39,000 mansion / m, a 175-square-meter house, with a total price of about 6.88 million yuan. In other words, the current set of 175 square meters of houses, the market price is lower than the total four years ago, the principal and interest of 7.545 million yuan of bank loans.

And when reporters the identity of the owners prepare to sell, another store employee chain of family property, said the mansion, "the lowest closing price since the year 330 million yuan / square meters, the average price of 360 00-37000 yuan / square meters, open up a little after the purchase, listing price may also be a 42,000 yuan / square meters. "

Another agency official said, the location of the property is in Hangzhou, the traffic is relatively good, " luxury ", the minimum area has more than 170 square meters, there are more than 300 square meters large. The current price of about 42,000 yuan / square meters, August 2013 to March of this year, prices are 50,000 yuan / square meters or more.

When the reporter to call the buyers as developers are Kunlun, the company employee said prices did not fall sharply, the current price of about 37,000 yuan / square meters, compared to 2010 also did not fall.

There are real estate agencies said that Hangzhou second-hand house prices fell by less than Yishoufang, second-hand housing decline of about 1000-3000 yuan per square meter, while Yishoufang largest decline in 7000 yuan, the average also fell more than 5000 yuan.

Shanghai E-House Real Estate Institute data show that from January to June, the national real estate transaction price fell 0.8%, compared with 1-5 months increased 0.1 percent, the average transaction price of residential fell 1.5%. Even in the country horizontal comparison, Hangzhou also prices declines larger cities. Two quarters of this year the average transaction price of 15,389 yuan, compared to last year fell by 12.2%.

Experts believe that "abandoning room undesirable."

As for the above-mentioned real estate owners default "abandoned house" reasons, developers have Kunlun Ministry of Justice said, "We do not know, it should ask the owners themselves."

Aforementioned agency also said that "more than the purchase price of these luxury 600 million or more, a lot more than 10 million, many people purchase but also to invest now prices fell so much each month to repay the loan are a few million , the future still has a few million, so a lot of people think, long pain as short-term pain, even if the loss of some of the down payment and interest already paid, it is still throwing bank forget. "

The industry believes that, in addition to falling house prices, housing prices far below the individual holders continue to pay the price of mortgage loans, resulting in the housing into a "negative equity" appears initiative abandoned house, the more likely is the buyers own financial problems, or real estate group funding strand breaks and "off for."

Shanghai E-House Real Estate Institute researcher Yan Yuejin believe that mortgage delinquencies increase, for several reasons. The first part of the region does appear to housing price declines greater than the amount of mortgage loans, thus making the owners of such housing loan initiative decline.

Second, commercial banks had qualified homebuyers credit audit lax. From a practical perspective, a lot of banks to the buyers of the evaluation process, often face lax scoring to assess the value of water situation. The most typical is the buyers income, can actually be fake. This is often the ability to make mortgage loans to be false elevation, thus making the latter part of the repayment pressure.

Yan Yuejin believe that house prices, indeed breach will provide customers a reason to. "From the perspective of the contract entered into, the buyer and seller are in line with the principle of openness and fairness to sign the agreement. Since allowing housing prices brought about positive existence, will allow the existence of the risk of falling house prices only way is a fair trading mechanism So from this perspective, legal and moral constraints, abandoned room tide does not appear immediately, but you really want to be alert to this kind of pressure. "

But from a legal perspective, because of falling house prices and "abandoned house" refused bank loans also seem desirable.

Beijing lawyer Li Liu holy law firm also said that housing mortgage loans with real estate as collateral in general, the owners also overdue bank loans go to court, if the owners do not have other assets to repay the loan, the court will usually auctions of real estate. Auction proceeds fund the bank as mortgagee first priority for repayment. If enough to repay the bank loan principal and interest and liquidated damages, and the remaining will be returned to the owner. If the auction was not enough funds to repay bank loans, the court will pursue other assets to repay the owners

No comments:

Post a Comment