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Banks, realtors punished for gray-market mortgages
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Commercial banks in Shanghai will today stop cooperating with six major property firms for one month while branches of seven commercial banks will suspend home loan services for two months as punishment for violating home loan policies, the local banking authority said in a statement late on Saturday.
The measures seek to clamp down gray-market mortgages, the Shanghai Office of the China Banking Regulatory Commission said. But it clarified that home purchase contracts whose online registrations were completed by 12am Sunday will remain intact.
“After careful inspection of the mortgage business at commercial bank outlets, certain misconduct (which took place before March 25 when the latest tightening property measures came into effect in the city) had been discovered at some lenders,” the statement said.
These “mainly include transferring home loans to a third party (neither the seller nor the buyer of the house) who later wired the money to a property agency, as well as down payment raised through property agencies.”
The six property firms include Shanghai Homelink Real Estate Agency Co, Shanghai Pacific Rehouse Service Co and Shanghai Hanyu Property Consultancy Co. The seven bank outlets include the local sub branches of the Industrial and Commercial Bank of China, the Bank of China, China Construction Bank, the Bank of Communications, Industrial Bank, SPD Bank and HSBC Shanghai branch (excluding all sub branches), the statement added.
The measures came about a month after a joint notice from the CBRC’s local office and the local branch of the People’s Bank of China vows to step up efforts to regulate home mortgage operations, reduce systematic risks to the banks and develop the property market healthily.
During the annual political consultative meeting in Beijing in March, Pan Gongshen, the PBOC’s deputy governor, said that mortgage applications would be scrutinized, and down payments raised through property agencies, small-loan firms and peer-to-peer networks would be rejected as the government curbed soaring home prices in first-tier cities,
Prices of new homes, excluding government-funded affordable housing, in Shanghai rose 4.3 percent in March from February, according to the National Bureau of Statistics.
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